Telecommunications regulators around the world are concentrating on measures to increase competition in the market. Mobile number portability (MNP) is a best practice widely implemented in the developed world. In Latin America, five countries have already implemented the measure, and another five countries have it on their regulatory agendas and will be implementing it soon. MNP enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile operator to another. It is known as a way to reduce switching cost barriers. The freedom to change without losing the number opens the market to more mobility, which in turn increases competitiveness by forcing operators to fight with better service and prices. This succession of events ultimately benefits current users and attracts new users to the market.
Mobile markets are very dynamic. Operators are constantly introducing new services attracting customers that end up replacing fixed phones with mobile ones. This trend is moving people toward a single number that has become their personal identification number — a common place where clients, coworkers, friends and family can reach them. Although it is very clear to regulators that they should introduce portability, operators feel vulnerable to the threat of losing customers to competitors. As mobile markets reach 100% penetration, operators look for customers in their competitor’s client base. Portability unlocks the telecom market by opening it up to all operators. It also elevates the telecom market to a more strategic level, where customer relationship management, services and products are the differentiators
We believe that portability represents both a threat and an opportunity for operators. Which one it is depends on a given operator’s ability to anticipate customer needs and wants and to offer services that have more value to them.
This Insider explores the reasons for regulators to implement portability and the approach that operators of different sizes have taken to cope with MNP. We discuss the impact that the measure has in the market, the strategic approaches taken by small and large operators and their outcomes.
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