The Big Switch
By Carlo Longino, Mon Nov 24 14:00:00 GMT 2003
Number portability hits the US today, and it's destined to set of a tidal wave of activity all across the industry. Who will be the winners and losers?
Barring any last-minute intervention forced by scared rural wireline carriers, number portability begins today, promising something in between controlled chaos and all-out confusion. The clear winners in this process are American mobile-phone users, who can now count on even more competition for their phone lines, resulting in lower prices and improved services.
We're already seeing some impact of portability on pricing and services. Most carriers are trying to sell users on some new feature -- Verizon and Sprint have new push-to-talk services, AT&T Wireless launched its high-speed EDGE network, and Cingular's got its FastForward service that automatically forwards calls to a landline without using cellular minutes.
They're pushing on price, too. Sprint has pushed back the start time for its off-peak minutes two hours to 7pm, while T-Mobile now lets users on some plans start using weekend minutes at 12am Friday. T-Mobile is also aggressively pricing its data services, offering unlimited GPRS WAP and limited Internet access for free, its T-Zones WAP content package for $4.99 per month, and open GPRS Net access for $20 per month. It also offers subscribers unlimited access to its nationwide Wi-Fi network for $20 per month -- and for $40 a month for fairly extensive mobile access, that's hard to beat.
So it's clear the winners here are consumers. But which carriers stand to gain the most? T-Mobile's aggressive pricing should win it some small business and mobile professional customers, while Nextel's strong coverage and solid reputation should also help it steal away some business customers. Verizon seems to be gaining a lot of momentum, as its strong nationwide coverage is a key selling point, and it also might be buoyed by the fact that it was the first (and only) carrier to come out early in support of portability, while other carriers fought it to the bitter end.
Business and corporate accounts could also account for a large amount of ported numbers. Businesses will take advantage of portability to move all their accounts to a single carrier, and will likewise take advantage of the newly competitive market to secure large volume discounts. Again, Verizon's coverage will help it here, and AT&T looks to get a boost from EDGE and from having the widest selection of enterprise-class handsets and devices.
Wireline carriers are running scared, and they should be, now that one of the final barriers for many people to go totally wireless has been cut. It's pretty much a given here in the US that nobody likes the landline phone companies -- their monopolistic practices, poor customer service and generally hard-headed attitudes to the public don't make them a lot of friends. Many people's first reaction to the idea of ditching their landline and going wireless was the fact that they'd have to give up a number they may have had for years -- and now that obstacle is gone. Just as mobile calling has gotten cheaper, landline service has gotten more expensive. Even as landline carriers slash prices on long-distance calls, wireless carriers have made the long-distance distinction irrelevant, giving users free long distance and making every call "cost" the same.
This should prove to be a boon for local wireless carriers like MetroPCS and Leap Wireless' Cricket service, which offer limited-mobility plans. For about $30 per month, users get unlimited mobile service in their home area, and can add free long-distance calls and other services for a few bucks more each month. These are perfect plans for people that don't travel, since the phones can't be used outside the local area, and excellent as landline replacements.
Handset manufacturers must be loving WNLP too, as most everyone that switches carriers will buy a new phone. Thanks to the myriad incompatible standards and networks in the States, most people that change will have to buy a new device, and even people switching from one GSM network to another will likely have to as well, thanks to handset-locking and the carriers' reticence to give out unlock codes.