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Only One-Third of Consumers are Porting Wireless Numbers

Remember when local Wireless Local Number Portability (WLNP) was the hottest topic in the business? The mandate to provide number portability had carriers in a snit over what it might do to their bottom lines. If it seems like only yesterday, it wasn’t: That was back in November 2003.

Now more than two full years after WLNP took effect, it appears the mandate has not had as much of a negative impact as previously expected. While there was some pent-up demand for number portability during the first few months after WLNP took effect, more recently porting has leveled off:

Postpaid subscriber churn has decreased to close to two percent over the past few years.
Only 36 percent of respondent reported porting their wireless phone numbers when they made their mobile device purchases, according to NPD's recent Wireless Retail Survey.

There are several factors that can account for the decline in the number of consumers porting mobile phone numbers. For example, many consumers are not that attached to their wireless numbers. In addition, the continued growth of first-time wireless subscribers, and more aggressive efforts by carriers to retain existing customers, both serve to keep number porting to a minimum.

Bucking the conventional wisdom within the wireless industry, most people are not tied irrevocably to their mobile numbers. This situation may be due to the fact that most wireless subscribers use their phones primarily for personal purposes. In some cases, though, a consumer might even prefer to get a new number rather than keep his old one (perhaps because of divorce, a new job, or some other “new-beginning” reason).

Paying Attention to Customer Retention

Over the past several years, carriers have paid specific attention to their customer retention efforts, by focusing on the following tactics:

Contracts – Around the time WLNP came into effect, carriers intensified their efforts to move subscribers to one- and two-year service contracts. A consumer on a contract is less likely to churn when faced with early-termination or cancellation fees.
Incentives and upgrade programs – Many carriers have begun to offer handset upgrade incentives to subscribers when they are 18 to 24 months into their contract period; these upgrades are tied to contract extensions.
Better customer care – While consumers may dispute the fact, carriers firmly argue that they are working to improve their customer care, which they report has instilled greater customer loyalty and reduced churn.

The number of first-time wireless subscribers may also have an effect on why only a third of respondents told NPD they ported their existing wireless number. According to NPD's Mobile Phone Track, nearly six percent of mobile phone purchasers did not previously have a wireless handset; therefore, they did not have a number to port.

In addition, while the media likes to discuss the love-hate relationship people have with their mobile phones, some consumers are actually happy with their service. When asked about how they selected their handset model, nearly 44 percent of respondents stayed with their carrier and purchased another handset

Finally, there are other factors that make it difficult or impossible for the consumer to port his number. When a consumer moves to another city, WLNP often does not apply, since it is limited to local areas.

If nothing else WLNP has forced two major changes in the wireless industry: first, it has forced carriers to pay more attention to their customers; second, it has given consumers more choice and flexibility when they consider their wireless options. As long as number porting and churn remain manageable, WLNP should go down as a win-win for both consumers and carriers.

-- Charul Vyas, Senior Wireless Specialist