6/20/2007 9:42:00 AM
3: 'Number porting takes too long'
3 CEO Kevin Russell has returned to the UK after working for Hutchison Whampoa in Australia, Hong Kong and Israel and it’s not just the British weather he’s having to get used to.
Six months into his job as chief of the youngest UK operator, Russell has come out fighting. The issue? The time it takes to port a number from one network to another.
What could be just another dry regulatory issue has been brought into sharp focus for 3, as it seeks to take customers from its rivals and fight the growing trend for customers to run phone numbers in tandem, keeping their old number on their old network, while the old network enjoys all the call termination income.
Rapid, well-publicised and easy mobile number portability (MNP) is ‘a basic prerequisite’ of a competitive market, says Russell. He compares the experience in Australia where it takes two hours to port a number, ‘[port] at lunchtime and it’s done by the time you get your coffee’, with the UK’s five days. Five days when the ‘donor’ network’s retention team can swing into action and pull out all the stops to prevent a customer from leaving. Ofcom says it is listening and will require easier porting from mobile operators, but it is not fast enough for 3.
‘Frankly, it’s unacceptable for a market as developed as the UK. By 2009, there will be an MNP structure that starts to operate like others. That’s a problem for us; you’re probably looking at a 2012 timeframe for it to become embedded. It’s clearly a massive issue for us. If we’re still staring at a marketplace where it’s hard for a customer to move their number, then it’s more of an uphill battle,’ says Russell.
He wants a new system in place by the end of 2007 and having overseen the implementation of fast number porting for Hutchison in Australia in 2001, he dismisses the idea that it is too expensive or too great a technical challenge to introduce quickly.
Russell links the issue of number porting with mobile termination rates, arguing that due to a traffic imbalance, partly attributed to the UK’s slow porting standards, 3 is effectively subsiding its profitable rivals: ‘In 2006, we subsidised the mobile incumbents to the tune of £50m. The Ofcom decision [on reducing what 3 can charge to connect to its network] just means that subsidy will increase over the coming years. A new entrant subsidises profitable incumbents. It doesn’t seem right that the competition authority exacerbates that.’
Russell compares the UK market, where just 10% of 3’s customers have ported their number from a rival, with Australia, where 42% have. The slow porting regime is made worse by the requirement that a customer makes a porting request to the old ‘donor’ network, not the new one.
Slow porting‘This is the only market I have come across where the customer has to go back to the operator to get permission – the donor-led structure is flawed; it gives a win-back opportunity.’
And with the Big Four making retention their priority, it’s an opportunity they are seizing with both hands. ‘Right now, the retention offers are significantly more aggressive than the standard deals. Some of the retention offers made to people porting from Vodafone to 3 have been phenomenal.’
Now, Russell is ready for a fight to get Ofcom to speed up number porting. ‘There is complacency and apathy in the marketplace. Can we get past that or do we have to go through an appeals process?’
3’s disruptive pricing did so much to make the UK a fiercely competitive market, but Russell now feels that instead of being encouraged by the regulators, it is being held back. ‘It doesn’t make any sense for us to subsidise the others. That isn’t smart competition policy.’