Mobile Number Portability (MNP) is a non-event, with operators experiencing a number of system problems and consumers reluctant to make the switch.
MNP, which was introduced on November 10 after numerous delays, allows consumers to switch operators while keeping their number.
One operator said there was a massive problem with the porting process and that 70% to 80% of all port requests are failing for numerous reasons.
The success of MNP is difficult to measure because of a “gentleman’s agreement” between cellphone operators not to release any figures that show how many consumers have ported to or from the operators.
However, some operators have indicated that the numbers are insignificant, with one operator stating that there have been less than 1Â 000 ports in the first month of MNP, a fraction of the estimated 33million cellphone customers in South Africa.
Analysts say that competition caused by a price war will significantly increase the impact of MNP, because then consumers will be able to see the benefits of switching operators. They have highlighted the regulation of interconnection tariffs as a necessary step to stimulate competition. Interconnect is the tariff one operator charges another to terminate a call on its network.
Industry stakeholders say the current interconnect regime is worth R5billion to R6billion a year each for MTN and Vodacom, and a study conducted last year said cellphone call rates could drop by 30% if interconnect was regulated to cost.
Interconnect tariffs were 20c in 1994, but have risen by 635% since then, to R1,25.
Robbie Lipschitz of Genesis Analytics says it all comes down to whether or not operators are prepared to compete aggressively on the back of MNP.
“The operators have a gold mine at the moment and they are hesitant to destroy value in the market,” says Lipschitz. “By value I mean how much they can charge for a call.”
A recent research report by World Wide Worx, titled Mobile Number Portability in South Africa 2006, forecasts that only 500Â 000 cellphone users will switch operators.
The report says only 25% of consumers knew what MNP was and, of those who indicated they would switch, the most common reason given was cheaper calls.
Cell C have gained 56% of all consumers who chose to port, while Virgin Mobile claim they have gained more than 40% of the porting customers.
It stands to reason then that Vodacom and MTN have been net losers in the MNP process, although Vodacom’s spokesperson, Dot Field, has dismissed the loss of customers as negligible.
Field says Vodacom will report on the MNP process in their interim or annual reports, but that the number of ports do not warrant the releasing of statistics at this time.
MTN spokesperson Wandile Mkhatshwa says MTN cannot disclose any figures owing to the “gentleman’s agreement” between all operators for “confidentiality” reasons.
Mkhatshwa says the agreement does not preclude Icasa from disclosing, as it is the communications regulator and all operators report to it.
Virgin Mobile spokesperson Nicholas Maweni says that, for the larger operators, losing a few hundred customers may seem negligible because of their large subscriber base, but Virgin is happy to welcome the porting customers.
Maweni says 60% of all customers who have ported to Virgin Mobile are ex-Vodacom subscribers, 30% are from MTN and 10% from Cell C.
There have also been numerous failed port requests at Virgin Mobile, with between 70% and 80% of ports failing.
“There are a lot of customers who approach us for porting and their port is not successful,” says Maweni.
Reasons for failed ports include incorrect information supplied by porting customers and customers failing to settle their accounts with their original operators.
Mkhatshwa says MTN is experiencing more successful ports than not.
Maweni says that when the larger operators start educating their subscribers about MNP, Virgin expects to see a massive upsurge in port requests.
“It should have been driven by Icasa,” says Maweni. “It should have been their mandate. But, unfortunately, they are probably too under-resourced to do it.”