Dissatisfied South African cellphone users who have been eagerly awaiting the opportunity to jump ship to another operator while keeping their number, will have to wait another two months.
The Independent Communications Authority of South Africa (Icasa) announced this week that mobile number portability (MNP) would once again be delayed, this time until November 10 2006.
This is the second time the introduction of number portability has been delayed. A previous June deadline had been extended to September 18.
The further extension to November follows representations by Vodacom, MTN and Cell C to Icasa that they were not ready for the introduction of number portability.
Icasa has said it will sanction the three for missing the September deadline. It can impose a fine of R500Â 000, but one source indicated it was studying the law to ascertain exactly how this fine may be imposed.
Critics say the imposition of a R500Â 000 fine will be no more than a slap on the wrist for the three incumbents.
Research has shown that countries that suffer delays in the implementation of number portability experience less customer churn between operators than those countries that met their initial deadline.
Critics argue that South Africa’s cellphone operators are aware of this and the further delay is a stalling tactic to limit the customer losses for established operators.
Virgin Mobile, which launched in June this year, looks set to be affected the most by this further delay in number portability and its CEO, Sajeed Sacranie, says he can’t understand why implementation is such a difficult task for the other operators.
“It is almost as if they are calling the regulator’s bluff,” says Sacranie. “There has been a lot of foot dragging so they haven’t had time to do adequate testing.”
Virgin Group’s chairperson Richard Branson was so incensed by the new delay in implementing MNP that he responded with an open letter to South Africa’s cellphone customers.
Branson described the new deadline as an “absolute disgrace” and said it was “completely unacceptable”.
“Clearly, South Africa’s mobile operators are dragging their heels on this issue because it isn’t in their best interests,” says Branson in his letter.
“It’s time the regulator flexed its muscle,” says Richard Hurst, a telecoms analyst with BMI-TechKnowledge. “But what type of punishment — a fine. They have so much money they will laugh at that.”
James Hodge from Genesis Analytics says Icasa has a reputation for being weak regarding punishment. He says it is this reputation that has contributed to the “vicious cycle” that allows stakeholders to act with complete impunity.
“Virgin has come in on the back of number portability being implemented,” says Hodge. “Any market share they hoped to capture at an early stage may be lost with this move.”
An Icasa official, who agreed to talk on condition of anonymity, says the new delay may cause consumers to lose confidence in number portability.
Icasa’s manager of numbering and administration, Harrish Kasseepursad, says that there would be some form of sanction taken against the cellular operators for the delay, but says he cannot divulge details as the matter was still being finalised.
The cellular operators attributed the further delay to the late delivery of the central reference database solution equipment.
“Although a delay is regrettable it is in the interest of the public that the testing phase is extended,” says Vodacom spokesperson Dot Field.
Cell C’s spokesperson, Vanashree Pillay, says its research has shown that Cell C will be net gainers from number portability.
“Cell C therefore remains confident of its prospects and eagerly awaits its implementation,” says Pillay.
MTN’s group executive for regulatory affairs, Nkateko Nyoka, says that, to date, MTN has made significant progress. “Testing is now proceeding in a simulated environment. The challenge, however, remains to be able to receive and port customers successfully in a live environment,” says Nyoka.
Ready to go where talk is cheap
About 500Â 000 cellphone users will switch operators when mobile number portability (MNP) is implemented, according to a new research report conducted by World Wide Worx.
The report, titled Mobile Number Portability in South Africa 2006, looks at implications, expectations and intentions of South Africa’s consumer, corporate and SME segments.
The report says that, although there are 33-million cellphone subscribers in South Africa, it was likely to be only 10% of the five million contract subscribers that would switch operators.
The report said only 25% of consumers knew what MNP was and that, once it was explained, only 27% said they would be likely to switch.
The most common reason for switching operators was to get cheaper calls (48%), while 19% said they would switch for better coverage and 10% because of service dissatisfaction.
In contrast 71% of companies understood what MNP was but only 19% of small companies and 22% of larger companies were planning to switch.
The most common reason for switching operators among SMEs was also cheaper calls (39%), while only 18% of large companies would switch for this reason.