NRA opts for two-hour portability

UK National Regulatory Authority (NRA) Ofcom has announced that mobile number porting in the UK will take just two hours from September 1, 2009. This follows a previously announced reduction from the current five days to two days from 31 March 2008.

In the review of the current European framework, the European Commission proposed a maximum of 24 hours for operators to move their number to new providers. It is hard not to see Ofcom's decision as partly a knee-jerk reaction to this proposal. While it has always been Ofcom's intention to further shorten porting times, the timing shouldn't be considered as purely coincidental.

It is also conceivable to think that the 'name and shame policy' we saw used by Reding following the international roaming legislation could again be used to trigger a competitive league, in which member states fight for top spot - all keen to promote their mobile industry as being the most competitive.

The UK is the second EU country to have recently revised mobile number portability (MNP). In May 2007 the French regulator, ARCEP, shortened the process from two months to between seven to ten days. At the time we criticized ARCEP for failing to go far enough, since for MNP to be effective it requires the porting process to be less than five days. Certainly Ofcom's intention goes much further than most other regulators in Europe and is a step closer to Asian countries; in South Korea it is possible in less than 30 minutes.

From a market perspective this will have very little impact other than improving convenience for users. This is despite the smallest network operator, 3, lobbying for change. Ultimately, number portability is now of little commercial importance to the UK market.

First and foremost, the UK market is so competitive and market share relatively evenly balanced between its main protagonists (there is just 3.5% difference in connections market share between the fourth and first ranked operators) that 3 is the only operator that can hope to benefit. However, the key driver for switching networks is to take advantage of handset or tariff offers and current porting restrictions have not prevented this. It is unlikely that users will now start switching any more just because porting is quicker.

Furthermore, not all subscribers changing networks even take their number with them. Globally, the number of subscribers porting does not increase as porting time decreases. The global average is under 10% of customers porting. In 2005 (when porting took 7 days) just 1.2m UK subscribers (1.8% of total connections) ported their number. Therefore, 3 cannot rest its hopes on this changing its market position overnight. It is unlikely to stimulate any major shifts in market share.

Therefore, like Ofcom topping ECTA's performance tables earlier this week, this announcement is best seen as Ofcom's intention of remaining 'best of breed' among Europe's NRAs, rather than an action that will stimulate a massive shake up of the market.

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