Snapshot: 2014 update on number portability in the Caribbean

An update of our 2012 review of the status of number portability in the Caribbean.

Number portability (NP), the feature implemented by telecoms companies that allows subscribers to retain their numbers independent of the service providers they use, is considered one of the hallmarks of a maturing telecoms sector. In previous years, NP received considerable attention in the Caribbean, leading a number of countries embarking on the implementation process. In 2012, we prepared our first Snapshot on the subject. A year and a half later, we revisit the issue to determine how much progress, if any, has been made.

Which countries have implemented NP?

Since our review of NP in the Caribbean in August 2012, not much has changed as reflected in Table 1. The Bahamas is only country that has successfully launched NP, which occurred in December 2013. The ECTEL Member States (Dominica, Grenada, Saint Kitts & Nevis, Saint Lucia, Saint Vincent and the Grenadines), Jamaica, and Trinidad and Tobago, which in our previous Snapshot were reported to have commenced the process, are still not at a stage where portability can be announced.

Table1: Status of NP across select Caribbean countries as at February 2014 (Sources: regional newspapers, regulator websites, industry publications, government papers and reports)

Why is there such a fuss about implementing NP?

Although several Caribbean countries have embarked on NP initiatives, the fact that so few have successfully completed the process might suggest that somehow it might not be important to their telecoms sectors. However, the truth is that countries realise a number of benefits when NP is properly implemented, as few of which are outlined below.

First, NP supports customer welfare. Customers no longer lose their numbers – which essentially are personal identifiers – when porting from one provider to another. Additionally, in the majority of frameworks that have been implemented, the telcos typically bear (most of the) porting costs. Hence customers are not unduly burdened with that expense, which could be a deterrent to them switching providers, should they believe it necessary.

Second, from an industry perspective, NP tests and ultimately strengthens competition.  When customers are able to “vote with their feet”, should they not be satisfied with the services of one provider over another, the providers themselves get another means of measuring their performance and in the market. Thus, they have an opportunity to adjust their strategies to better respond to customer needs.

Thirdly, and a spin-off of competition, is an increased emphasis by telcos on innovation to keep customers happy. According an article published by University of California researchers:

…Mobile operators fear increased churn because they obtain higher lifetime revenue from customers who stick around for a long time, and this enables them to recover the cost of acquiring the customer. This will cause operators to compete harder to retain existing subscribers, both by lowering prices and by innovating and offering better services enabled by newer technology.  

(Source: The Analyst).

Although the article focussed on mobile NP, the point about customer retention is applicable to most telecoms services, and even to business generally, since relatively speaking, it is more expensive to attract and win over a new customer than it is to keep an existing one. However, prior to NP, telcos might not have fully developed their customer retention strategies, since subscribers were essentially “locked in” to a particular provider. In a post-NP environment, this is an area that would need to be developed.

The long hard grind…

Having tracked the status of NP in the Caribbean since 2012, it ought to be appreciated that implementing NP can be protracted and challenging process. Frequently, especially in jurisdictions where public financing might be limited, countries tend to require the telcos to bear the costs of modifying their networks to facilitate porting, along with the procuring whatever additional equipment they might need.

Additionally, the carriers must actively participate in the discussions to flesh out the NP framework, and agree on how it is to be implemented. However, not surprisingly, telcos with large market share are often reluctant to participate and do employ delay tactics. Hence it is usually in the industry working group phase that proposed implementation timelines get derailed, as may be happening in the ECTEL Member States, where the work of the Industry Working Group should have been close to completion, if not completed already.

In summary, only a handful of Caribbean countries have successfully launched NP. Almost half of the countries examined are in the process of implementing it, though considerable challenges exist, most critical of which might be securing the cooperation and support of all parties involved.

Image credit:  plenty.r (flickr)

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