In keeping with a pan-EU deadline of 25 July 2003, from today Ireland will get its first real taste of number portability. Until now, mobile users could only avail of partial mobile portability, which allowed mobile owners to transfer the basic subscriber number but not the 085, 086 or 087 prefix when moving between operators. Full mobile number portability (FMNP) – where end users will be able to retain their full existing mobile number when moving between operators – is now available.
It is understood that the building of the system by the three existing mobile players to enable full number portability is the largest private sector logistical project ever implemented in Ireland.
What the advent of FMNP will mean for the Irish mobile market is anyone’s guess. Some are expecting it to shake up what is regarded as a staid and saturated market. Others believe that FMNP will have a minor, insubstantial effect on a market in need of a good shake up. Another, more challenging school of thought believes that it will pave the way for an exciting new breed of mobile virtual network operators (MVNOs) who will offer services on the back of an existing operator’s network at knock-down prices, creating considerable disruption for established players such as Vodafone and O2. In the UK, nimble MVNO players such as Tesco and Virgin Mobile are causing major levels of churn.
According to an informed source, all of the operators and the Commission for Communications Regulation have conducted research into the likely effect of FMNP on their market – big bang or nervous whimper – and apparently all have come up with vastly different scenarios.
O2, the only player to publish any research findings on the subject, found that more than 71pc of Irish mobile phone owners are unaware that FMNP is actually happening. The company surveyed more than 600 people in Dublin, Limerick, Cork, Galway and Waterford and found that 55pc of mobile users would switch networks if it meant they could get better value for money and retain their old mobile number.
With mobile penetration in Ireland at an existing 80pc of the population, two players hold sway in the market – O2 and Vodafone – with some 96pc share of available market. This leaves Meteor Communications, the last licensed GSM player to enter the Irish market after being held up by lengthy court cases over the awarding of its license, with a measly 4pc of the market.
Meteor has long been watching FMNP as the opportunity it needs to break out of its restrictive pocket. Already the firm has embarked on ambitious customer sign-up marketing campaigns offering free holidays with every new phone, has slashed the cost of its calls and offers free text messaging to Meteor subscribers communicating with other Meteor subscribers. The company has also confirmed that it is willing to support one or more MVNO players on its state-of-the-art, yet underused, network.
For O2, the number two player in the Irish market, FMNP may allay its desire to close the gap on dominant market player Vodafone.
Meteor’s communications director Andrew Kelly feels that businesses, rather than consumers, will warm to the idea of FMNP the fastest. “The initial benefits will be seen by small businesses and individual home office users. These people have been contacting us over the past couple of months about our business tariff campaign, which cuts the cost of business mobile bills by 35pc. However, the fact that to avail of the deal up to now meant that they would have to change the prefix on their mobile number and that would have severe consequences for small businesses. The chances are that these days their customers and vendors don’t know their numbers because they are programmed into their own phonebooks. Therefore, the retention of the original number, including prefix, is a significant requirement.”
Kelly continues: “In the immediate sense, full number portability will attract business users. On the general consumer side the main driver has been the handsets and phones on offer and in countries where number portability has been initiated, handsets swung change. Therefore, the chance to retain the original phone number yet get a better phone at lower call prices should prove to be a force for disruption.”
On the question of MVNOs, Kelly confirms the Meteor’s willingness to host new players. “We have received a number of proposals but so far have not been impressed. We have been approached but no proposal has led to the creation of a new MVNO. That said, in the likelihood of there being an MVNO being created in the Irish market, it will be on our network,” Kelly says.
Eyes are also on Hutchison-Whampoa, the owner of the third 3G licence, to host MVNOs. The company has recently signed a €100m agreement with Esat BT to build the initial phases of its 3G network in Ireland, adding to speculation that Esat BT is also fostering ambitions to enter the Irish mobile market. With Eircom’s non-compete moratorium on the mobile market due to end next year, there has been speculation that the company might either buy Meteor or may become an MVNO on the company’s network.
As for how the two leading players in the Irish market, Vodafone and O2, are watching all of this potential disruption, it appears that both players are being stoic, yet cautiously optimistic, in the face of change.
Paul Farrell, head of commercial marketing at O2, explains: “Obviously we have something to gain in terms of market share. But we are conducting business as usual. Full number portability is the removal of a particular barrier in our eyes, but it is not a silver bullet solution.
“The Irish mobile market is reasonably savvy. We want to be able to keep the customers we have. To us, it is not about becoming the biggest player in the market but having the right customers that will enable us to meet our targets as a business. We aren’t looking for volume gain, but having the people who will pay for what they perceive to be the right service and value for money,” Farrell says.
Joan Keating, communications manager at Vodafone, says: “We have seen from our colleagues in Vodafone operations throughout Europe that the strongest brand will benefit the most from number portability and we believe that that will be the case in the Irish market too.
“In the initial weeks, we may see some churn, but as soon as the market settles down, the leading operator always benefits most. We have 1.74 million customers of which 71pc are prepaid. We have made the strongest investment in our network and offer the best coverage. Those characteristics will win out at the end of the day.”