Insights from the IQPC number portability summit

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Freddie McBride of CEPT presenting on service portability

I had the privilege of attending the IQPC Number Portability Global Summit earlier this month.

Number portability has been important for the development of competition in telecoms.  The conference addressed a wide variety of topics around the subject.

Here are some of the points that resonated:

  • According to one speaker, 75 countries have implemented number portability (NP) on their fixed (FNP) or mobile (MNP) networks.
  • Many others, including Jamaica, Trinidad, Afghanistan, Armenia, Togo and Tunisia are likely to implement number portability by the end of 2014.
  • Some countries, e.g. Russia, are struggling against technical and political barriers to implementing number portability
  • User experiences of MNP vary widely.  In Portugal, callers to ported numbers are greeted with a message warning them that the call may cost more.  In countries like Ireland, Ghana and Israel, mobile numbers can be ported in under an hour, whereas in some other countries it can take weeks.
  • In some countries (e.g. UK) the customer approaches her current network and requests porting (this is known as donor-led porting).  Best practice, followed by many countries, is that the customer requests porting from the network to which they wish to port (recipient-led porting).
  • The technical platforms and processes underpinning porting continue to evolve, in response to customer needs (or rather operators’ new product opportunities), technical advances and the pursuit of efficiencies.

My talk to the conference covered three areas:

1. The evolution of in the importance of number porting

Mobile numbers will continue to be an important way to be reached by almost all mobile users, but callers can now find and contact at least some of their targets on social media.

Porting
The evolution of the importance of number portability

Against that, the cost and difficulty of porting is now very low in most markets, so porting will continue to be popular for the foreseeable future.When truly portable mobile phones arrived (first for businesses, then with the advent of prepaid, for the mass market), the mobile phone number filled a need left unfulfilled: a simple reliable means of reaching someone anywhere, anytime.  Porting was introduced to improve the free functioning of telecoms markets.  In 2003, the value of porting to the Irish economy was estimated at £IR 129M.

More recently, social media has emerged as a far superior way to find and contact people.  Although it has limitations, it removes many of the costs of changing the mobile number.  However, in parallel the costs (monetary and service interruption) to users of porting continue to decline, and many operators incentivise port-in.  Number porting is here to stay.

2. Insights based on analysing data around porters.

Idiro has analysed data relating to porting customers in a variety of markets.  I presented a number of insights (anonymised, of course) on the characteristics of porters based on multiple markets.  I also described in detail the phenomenon of porting contagion.  The power of word-of-mouth results in many consumers following their friends when they switch networks.  This accounts for a high proportion of porting overall.  Big thanks to my colleague Lorcan Treanor for the analysis behind these insights.  Please contact Idiro to learn more about these insights.

3. How Idiro SNA helps meet the challenges of porting churn

Idiro SNA is a perfect fit for the marketing problems around mobile number porting.  Idiro scores can be used:

Porting campaign
Success of member-get member porting acquisition campaign using Idiro SNA scores
  • In Member-get-member acquisition campaigns.  Idiro identifies the customers on competitor networks who share communities with phone users on the operator’s own network.  The likelihood of these to port in is measured.  For the most promising targets, the on-net friends are identified for targeting with a member-get-member campaign.  This can provide very strong results.
  • In retention campaigns to reduce porting churn. This Idiro score is particularly popular with Idiro’s customers.  Idiro runs weekly or monthly models to predict porting churn, and Idiro’s customers use these scores in automated weekly or monthly retention campaigns, as well as in other areas such as the call centre.

I was conference chairman on the second day of the conference, which focussed on Service Portability.  There is great interest in the topic – where the customer can port not only their fixed and mobile numbers but other elements of their package as well, up to the entire quad-play bundle.

Though the concept is an appealing one, in practice the challenges are large.  Imagine being a customer with a home phone, mobile phone, TV and broadband bundle, and moving it to a competitor.  Every provider’s service bundle is different, and porting the entire bundle will require the customer (or the recipient operator) to make careful choices.  In addition, speakers pointed out that the delay in porting different services will vary, so during a transition period the customer will have some services from the door operator and some from the recipient operator.

There are challenges aplenty there and it is clear that there is no consensus over the best way forward.  One might (at the risk of overestimating the similarities) say that the discussion on service portability is where the number portability was 25 years ago.

Overall, the conference was well-organised and the  speakers well chosen.  However, like with many other telecoms conferences, the voice of the customer was hardly heard at all.  Quality was mostly described  in narrow telecoms terms, rather than the quality as measured by the user.  Almost no primary or secondary research on customer experience was presented by regulators, operators or vendors.  At the end of the conference (I missed one talk) I had not learned anything about consumers’ expectations for porting and how well they were being met.

If the voice of the consumer is not heard, how will their needs be met?  It was ever thus in the telecoms industry – or at least, it has been for the last 25 years – and it is reason that OTT services like Whatsapp are eating SMS and MMS’s lunch.  Despite being excellent in what it did cover, by its omissions this conference reminded me again of why the telecoms industry needs to cop itself on and develop a passion for the customer, or risk its share of customer communications being progressively eroded.

Prepaid mobile has peaked? Well, maybe

© GSMA Intelligence 2013

According to a GSMA Wireless Intelligence report just published, prepaid mobile has peaked. The proportion of mobile customers opting for prepaid plans is forecast to decline  as postpaid becomes more popular worldwide, except in the Americas.

This does seem to tally with the facts on the ground as Idiro experiences them – our mobile operator customers worldwide are finding that their consumer users are switching in larger number from prepaid plans to postpaid.

However, extrapolating this to a long-term trend is not so obvious.

From when Portuguese operator TMN gave us the world’s first prepaid mobile phone service until the advent of smartphones, the choice of prepaid vs. postpaid plans was, in the developed world, linked to the consumer’s attitude to debt and her ability to get credit.  I wrote a thesis (download) on the subject for my MA in marketing back in 1999.

Nowadays, everyone wants a smartphone and a data plan. (Idiro is still reporting high viral contagion of smartphone purchase among consumers.)  And smartphones are expensive – often beyond the reach of the younger consumer.  In countries where postpaid handsets are heavily subsidised, postpaid plans offer a way for the less well off consumer to get her hands on a new smartphone, and that seems to be driving the swing to postpaid plans in OECD countries.

But there are problems.  Some mobile operators privately report high bad debt rates among new smartphone customers – and attempts by telcos such as T-Mobile USA to unbundle the phone subsidy have run into problems.  There are masses of lower-cost smartphones in the pipeline – but it remains to be seen whether these will be cool enough for the consumer in the OECD or cheap enough to be affordable without a subsidy in less advanced markets.

Time will tell whether the postpaid mobile continues to grow at this pace.  In Idiro’s view the answer is linked to the price of smartphones, the growth of banking and credit checking services in the developing world, and above all to the global economy and its ability to create wealth for consumers.

(A version of this post also appears on the author’s personal blog.)