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 Home > News > Technology > Article
Plugged In: Phone Numbers Are Soon to Go Mobile Too
Sat March 29, 2003 10:29 AM ET
By Yukari Iwatani

CHICAGO (Reuters) - Life is about to get a little simpler for mobile phone users, who may soon avoid the hassle of changing phone numbers when switching wireless service providers, making it easier to take advantage of discount calling plans.

Sure, it's not quite the greatest thing since sliced bread, but it's a change that will make it easier for people to keep in touch, no matter who manages the calls.

Starting in November, U.S. regulators will enforce a rule that requires wireless operators to offer "number portability," the ability to switch carriers without making consumers give up their telephone number.

"We're changing the way we think about phone services," said independent telecommunications analyst Jeff Kagan.

"Traditionally, we've always called a place and asked for a person. Now we're calling the person no matter where they are. Everyone will have a phone ... Moving forward, you'll keep the phone number," he said.

That means consumers will face less of an obstacle when moving to cheaper service plans or switching services if they're not happy with their current provider, said David Heim, deputy editor of Consumer Reports magazine.

"The cell phone companies use the phone number like crazy glue," said Heim "You get the number, and it sticks with that particular cell phone company. If you want to change to a different company -- too bad."

In a recent survey conducted by Consumer Reports, about one-third of respondents said they wanted to switch wireless services. But a significant number of them didn't because they were unable to take their phone number with them, Heim added.

That is precisely the reason why wireless operators are fiercely objecting to this rule.

They argue that nearly a third of consumers already change carriers on a regular basis, and the new rule will only cause the provider-switching phenomenon to grow and, in turn, lead to more loss of customers and more damage to their bottom lines.

"I'm not sure why we need it, as 30 some odd percent of the customers in this country switch carriers every year without this grand and glorious number portability opportunity," said Richard Lynch, Verizon Wireless chief technology officer.

With about 143.8 million mobile telephone subscribers, the United States is the world's largest mobile phone market in terms of sales, according to Gartner Dataquest. To win new customers, carriers have offered huge bundles of minutes at low prices as well as discounts on phones, contributing to a high turnover rate.

Providers also said the cost for revamping their networks could run as high as $1 billion in the first year alone.

The Federal Communications Commission, which regulates the telecommunications industry, has extended the deadline once, but FCC Chairman Michael Powell said earlier this month, he expected to keep the Nov. 24 deadline.

Wireless operators continue to protest the rule and industry group Cellular Telecommunications & Internet Association is expected to argue against it in court next month, but companies like Verizon Wireless VOD.L VZ.N and T-Mobile DTEGn.DE have committed to meeting the deadline.

In addition to being able to take their phone number, analysts said consumers will also likely benefit from even more attractive price plans and new features as wireless operators work harder to keep customers and attract new ones.

Wireless operators like Verizon Wireless and Cingular Wireless BLS.N SBC.N , which have ties to traditional telephone companies, may even try to bundle their services to keep customers, analysts said.

"Consumers are the big winners on this issue," said Rudy Baca, a wireless analyst with Precursor Group.

Baca expects wireless operators to charge consumers to keep their phone numbers, but he doesn't expect that to cover all of the costs to make it happen.

Other analysts said they don't expect companies to charge much if at all, given the intense competition in the industry -- if one operator decided to offer the service for free, customers would flock to that company.

However, in the end, number portability may ultimately help the wireless industry in their competition with traditional telephone service because customers will be more likely to make their cell phone their main phone if they know the number will stay the same.

"Number portability is the last hurdle," Kagan said.

(The PluggedIn column appears weekly. Comments or questions on this one can be e-mailed to yukari.iwatani@reuters.com)

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