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Is Mobile Number Portability an April Fool Joke?

Martin Gicheru by Martin Gicheru
August 13, 2018
in News
Reading Time: 3 mins read
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TNS

With mobile number portability launching on the 1st April, a qualitative study by TNS and a review of international experience suggests that the impact may not be as great as regulators would like

From first April, Kenyans will have the privilege of switching mobile phone operators while keeping the same number.Assuming the porting service works. At a cost of 200 shillings. In a process which can take up to 48 hours. The CCK identified mobile number portability as an intervention which would improve competition in the Kenyan market – but how much impact is it likely to have? TNS RMS (formerly TNS Research International), thelargest leading market research agency in Africa have looked at the question from two angles.We conducted a short qualitative study to investigate what ordinary Kenyans think about the move, and have reviewed some experience from other markets. Neither suggests that portability will have a major positive impact on consumers.

The local perspective

Mobile number portability in Kenya was originally raised way back in 2004 and plans for implementation have been rumbling on since then with the launch now scheduled for April 1st.Our qualitative investigation amongst Kenyan consumers indicated that while press speculation and advertising by the likes of Airtel has meant that awareness of the plans are quite high, consumer comprehension remains generally low, and the benefits are not considered clear or compelling.

Some thought that portability simply meant swapping provider others thought you could use the same number for multiple providers. Around charges, consumers were not clear on whether they would be charged to swap back to their original provider. When the costs and details were explained, most participants did not think portability offered them sufficient benefits. In Kenya, multi-SIM holding is a common practice – 40% hold more than one SIM, according to the recently released TNS Mobile Life study .

So why pay 200 shillings to switch when you can just buy another SIM? Of course, there is the convenience of only having to remember one number – but who ‘remembers’ a number these days anyway? Consumers just have multiple entries in their phone books. Furthermore, consumers are used to being able to switch networks as frequently as they like. The 60 day porting cycle is really not in sync with these behaviors. Another concern was that when someone ports their number, callers might not be aware which network they are calling – and therefore what the costs are.

Granted, you are supposed to hear three beeps when you phone cross-network, but which network? Although of course costs are now a lot lower anyway due to the recent price wars. Which is sort of the point: portability is being introduced to improve competition and therefore reduce prices and improve services for consumers. The industry seems to be doing OK at that already! However, one major drawback to switching identified by consumers was the loss of a certain mobile banking service should a switch be made.If regulators are wanting to improve competitiveness, perhaps ‘portability’ in the mobile banking sector would have more of an impact.

The International Perspective

Looking at other markets suggests that the impact of portability varies considerably depending on the market context and execution. Hong Kong, for example, introduced portability in 1999. Consumers switching actually dropped significantly in the lead up to the introduction as service providers tied in customers with attractive contracts (most subscribers in Hong Kong are on post-paid packages).

Immediately after though, it increased as again service providers introduced aggressive acquisition offers (lowest price guarantees etc). So there were short term consumer gains, but after about 3 months, switching returned to normal levels. In the US (where portability arrived in 2004) also, despite a virtually seamless porting service (2.5 hours implementation time – compared with Kenya’s of up to 2 days), only about 5% of subscribers use the service and overall switching levels didn’t increase.

Still, service levels may have improved as operators concentrated on retaining customers. In Finland by contrast, regulators took a firm hand and banned long contracts and handset subsidies and made porting free. A price war ensued and the market share of the top 3 operators reduced from 99% to 88% after a year.

Conclusions

Generally, portability will have more of an impact where the cost is low or nil, the switching is seamless, and where multi-simming is low. None of these conditions hold in Kenya. But as already suggested, the market seems pretty competitive as is, and regulatory intervention to ease switching may not be needed. Mobile money though? Perhaps a different story.

Tags: Mobile Money
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Martin Gicheru

Martin Gicheru

Martin is the Managing Editor at Techweez, passionate about personal tech and telling stories of consumer experiences. Talk to me: [email protected]

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