Unless the deadline changes again between now and then, wireless carriers this time next year will have to port their phone numbers to allow Americans to keep their wireless phone numbers when they change providers.
Service providers will be forced to upgrade software and hire customer service representatives to meet the mandate, costing billions of dollars, claims research and consulting group In-Stat/MDR. "That will be a drain on money better spent on building out networks and increasing quality of service, which is what consumers tell us they want," says Travis Larson, a Cellular Telecom-munications & Internet Association spokesman.
The Federal Communications Commission extended the deadline faced by wireless carriers by one year after hearing concerns about looming deadlines for other requirements. By Nov. 24, wireless network operators, for example, must adjust their networks to handle a new number pooling system. The FCC has adopted a system for allocating phone numbers to wireless carriers in blocks of 1,000 rather than 10,000. Wireless carriers also are being required to increase security on their networks to comply with the Communications Assistance for Law Enforcement Act (CALEA), says Sprint PCS spokesman James Fisher.
The FCC gave carriers more time to implement wireless number portability, but wireless service providers still argue the funds required to meet the requirement will divert them from giving customers what they want. "The money we are being required to use to implement number [portability] is money that can't be spent on things like better coverage, more towers, and more products and features that customers want," Fisher says.
In-Stat/MDR estimates Verizon Wireless, Cingular and others together will shell out a total $900 million to $1 billion to upgrade their networks, and another $500 million each year to maintain the systems.
For their parts, Cingular anticipates spending $50 million to make the upgrades, with AT&T Corp. shelling out an estimated $42 million and Sprint PCS expecting to foot a $35.8 million tab, reports the research firm. Those figures include anticipated spending through 2002, but there likely will be additional costs for the initial upgrades, says In-Stat/MDR senior analyst Ken Hyers.
Of course, wireless number portability is intended to promote competition by removing a major obstacle that could make wireless users hesitant to defect to a new provider. At the same time, it creates another challenge for wireless operators -- churn.
In-Stat/MDR estimates an additional 22.2 million Americans will leave their current provider next year once they are able to retain their phone number. This would result in about 77.7 million people migrating to a new provider, or put another way, an annual churn rate of 40 percent. In-Stat/MDR estimates the churn rates due to number portability eventually will slow down. They predict in 2006 about 10.2 million customers will churn due to number portability, resulting in about 78.2 million people changing providers. One in three Americans leave their current provider every year, the research firm reports.
