On Nov. 24, wireless users for the first time will be able to switch carriers without losing their phone numbers. This will enable enterprises to change carriers with less hassle, but analysts warn that businesses shouldn't dump their current carriers right away.
According to the North Providence, R.I.-based research firm Mobile Competency Inc., as of the end of October, none of the carriers was well prepared to port competitors' numbers. Out of nine criteria that are important to enterprise customers in the porting of numbers, the firm found that the best carriers had only addressed five of those criteria.
In Mobile Competency's survey, Verizon Wireless Inc., Sprint PCS Group and Nextel Communications Inc. all scored the highest, satisfying five of the criteria. All of the six major U.S. carriers -- the other three being T-Mobile USA Inc., Cingular Wireless Inc. and AT&T Wireless Inc. -- lacked completed service-level agreements with one another to define the rules for porting numbers. Additionally, none of the six had completed business process testing with fellow carriers.
These are significant shortcomings, and they're likely to affect the service that companies receive, if they do decide to change carriers right away, said Bob Egan, president of Mobile Competency. Egan recommended that businesses wait to switch carriers until at least the end of the first quarter of 2004.
Jim Offerdahl agreed. The CEO of Traq-wireless Inc., an Austin, Texas-based company that helps businesses determine the most cost-effective wireless plans, said enterprises will likely wait six to 12 months before beginning to change their plans. When they do change, they are likely to see savings and increased service because the wireless landscape will be more competitive, he said.
Just because customers can now switch carriers while retaining their numbers doesn't mean that they will be released from their service contracts any earlier, said Tim Scannell, president of the Quincy, Mass.-based firm Shoreline Research. If a business chooses to terminate its contract prematurely, it will still be required to pay early termination fees.
The most important thing for businesses to do is ensure that, when they do decide to change carriers, their new service-level agreements outline exactly how long it will take to complete the switch, as well as the cost of doing so, Offerdahl said. Egan said that companies may want an assurance that porting is done in the middle of the night, so that they do not miss any calls during the workday.
While the carriers are required to port service to numbers within two and a half hours, that time frame is not required for large blocks of numbers. For example, Nextel spokeswoman Diane Rainey said that Nextel will be able to port a block of up to 50 numbers from one customer in two and a half hours, meaning it would take 25 hours to port 500 numbers from a given company.
Carriers are likely to offer better deals and longer contracts to keep their existing customers in the first months after the law goes into effect. In Finland, for example, after wireless number portability took effect this July, the churn rate -- the rate at which a carrier loses customers -- jumped from 10.2% to 21.8% at wireless carrier TeliaSonera AB. In response to the flood of cheap introductory offers, the company put forth a cut-rate offer to help it maintain its customer base.
Nextel is already offering customers a $100 discount on a new handset if they sign a two-year service contract. But carriers often advertise promotions to help draw in new customers at the end of the year, so it is hard to tell which deals are being offered because the end of the calendar year is nearing, and which are being offered because of the portability issue.
Scannell said that companies should watch for bargains and good service, but they should be wary of locking themselves into long-term contracts.
"The majority of businesses will want a one-year contract; anything longer than two is ridiculous," Scannell said.
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