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Carlos Valdecantos
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An entrepeneur with more than 15 years of telecom industry and consulting experience, Carlos has deep skills in strategy, marketing, sales & distribution, finance, program & project management, planning and implementation and is skilled at leading large, multidisciplinary teams. Carlos... More
My company:
mmC Group
My blog:
Consultant Value Added
  • Strategi reflections on Mobile Number Portability: solutions for our client’s fears. 1 comment
    Sep 10, 2009 5:08 AM
    Mobile Number portability (NYSE:MNP) enables mobile subscribers to change their service providers or their location without having to change their existing phone numbers. This means that if the subscribers are not satisfied with the services of their service provider, they can change their service provider while retaining the existing phone number.

    This infuses competition among service providers and forces them to improve their service standards to check subscriber churn. Many countries have made number portability mandatory to liberalize competition. Many others are in the process of implementing it.

    I already wrote about some of the key success factors that every mobile operator should consider when facing MNP, but I wanted to share some strategic reflections on the number portability after having interesting workshops with different chief executives in Europe, LatAm and ME.

    Although MNP has been present in Europe for a while, it’s funny to see how strategic this topic turns in those markets where the implementation is it’s incipient steps.  Questions like “How much should I assume churn will increase as a result of MNP?” or “Which retention strategies should be prepared to prevent abandonment originated in MNP?“ made me understand that this topic requires additional attention in the blog.

    There’s an inherent fear towards MNP before any telecom operators decides (in most of the cases imposed by the regulation authority). The underlying reason is simple: no one wants to loose clients, and MNP is initially perceived as a process to make things happen easier once the customers decide to churn. In some cases, my clients think that a whole tsunami of clients will immediately leave to other competitors the day after launching MNP. Incorrect.

    As you may see in the point of view, the average success portability rate is normally under a 10% of the subscriber base after launching the service. In general terms it can be assumed that MNP hardly approaches a 20% after a decade (ten years) of availability.

    This doesn’t mean that shouldn’t be taken in consideration but, strategically speaking, we should give it the right importance. Going back to the churn question, we normally find more inductors to churn or ARPU erosion than MNP such as multi-SIM ownership, sales fraud or pricing de-positioning. But there’s something correct in my client’s fears: we should define a clear retention strategy for the target segments with higher probability of being offered better promotions, service offerings, pricing plans or value propositions.

    The key questions here are:

    1. Who are the target segments (in my base) for my competitors?
    2. What measures should be considered bellow the line at different levels (customer care, sales and marketing departments)
    3. What impacts in my processes, systems and tools?
    4. How much do I have to invest / spend to prepare my organization?

    As mentioned in the document, portability gives more freedom to consumers, but it comes at a cost – both for the consumers and the operators. At the customer perspective the cost comes from the permanence contracts that the operators will ask from day 1after MNP. At the operators perspective, we give the perfect excuse to software and hardware vendors, system integration consultants, business process specialists and some other parties involved in the technical implementation to continue selling their service and infrastructure. Therefore, a non-minor figure should update the capex and opex figures of the P&L.

    But not all are bad news for the operators. The good news comes when number portability creates “liquidity” in the market. Apart from having to let its customers go, an operator also receives customers if its competitive position is better. This is the main take away: don’t be afraid of the process itself; be afraid of the value propositions that your competitors are going to prepare to get your valuable clients.

    Please find next a link to a whitepaper written as a result of our collaboration with different telecommunication service providers and operators, regulators and technology providers involved in MNP processes. Specifically, this work was done with a specific market focus in Latin America, where number portability is currently a hot topic. The core message applies to any other market where MNP has to be implemented in the short term. Enjoy the reading and feel free to contact me for further details or questions on the subject.

    consultantvalueadded.com/2009/09/10/refl.../

    Best, CVA.

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  • mirrama
    , contributor
    Comment (1) | Send Message
     
    Hi,
    What exactly are the challenges faced by mobile service providers in the face of MNP? What are the broad issues faced internationally? What are the broad strategies adopted? Can you please give an outline view? Regards, Ram( akaram@hotmail.com)
    5 Oct 2009, 03:37 AM Reply Like
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