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Mobile Number Portability: Moving with the Times

Mobile number portability (MNP) is the ability to keep one’s wireless (cellphone) number when changing wireless service providers (WSPs). While fixed-line telephone number portability is compulsory for major providers of basic telephone service in Canada, mobile number portability is not, despite the ever-increasing population who use this technology. Notably, Canada is one of the few industrialized countries that has not yet implemented MNP.

This paper discusses the desirability of MNP mandatory in Canada. The conclusions drawn are based on analysis of the following key areas: the history of the wireless communications industry and its associated regulatory scheme; the benefits of mandating MNP and the related obstacles to switching between service providers; and the costs of mandating MNP. Additionally, this report examines MNP from an international perspective, with a particular focus on the US experience with implementation. Based on the above, it is clear that the benefit to consumers of mandating MNP in Canada is significant and outweighs the cost to providers.

The principal advantage of implementing MNP is enhancing competition among wireless service providers, which is currently dominated by a few players. Customers wishing to “switch” from one WSP to another, or between a WSP and a fixed location service provider, face a number of obstacles in achieving that objective, including changing their telephone number. Studies have shown that consumers not only value their telephone numbers, but also that not having access to MNP is a significant factor preventing them from making a switch. In the absence of MNP, WSPs may settle into a comfortable oligopoly. Thus, MNP would serve a pro-competitive function.

Opponents of mandatory MNP point to what they claim are significant costs of implementation. These can be grouped into three categories: (1) Start-up costs; (2) Customer transfer costs; and (3) Operations Costs, each of which is addressed in the body of this paper. The cost of implementing MNP would likely be very small under all plausible scenarios, given technology facilitating Local Number Portability (LNP) for fixed-location suppliers is already in place and MNP could use this existing infrastructure. Incremental costs to the existing databases would be small, arising mainly from the need to increase storage and possibly upgrade processing capacity.

Making MNP mandatory in Canada would have a positive impact on competition among WSPs, and probably on competition for fixed-location service, as well. While the benefits are not likely to be large in the very short run, they may be quite significant in the longer run: in the absence of MNP, WSPs may settle down to a comfortable oligopoly. In such a situation, MNP would become important as a pro-competitive measure. On the other hand, costs of MNP likely would be very small under all plausible scenarios, given that LNP for fixed-location suppliers is already in place and MNP can “ride” on its infrastructure.

Implementation of MNP recently has been promised by the wireless industry on a less-than-aggressive schedule. Given the minimal challenges in introduction of this consumer benefit, it is in the interest of Canadians that the CRTC set an aggressive implementation schedule for MNP so that Canadians can begin moving with the times.

 

thumb_pdfMobile Number Portability: Moving with the Times
Download File Mobile Number Portability: Moving with the Times: mnp_final_web.pdf [size: 0.2 mb]

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