Jonathan Hooper, IT manager for real estate firm Barfoot and Thompson, is looking forward to the Government passing number portability legislation on April 1st.

“For our sales people, a mobile phone number is part of their brand and people spend a lot of money establishing that brand by putting their phone number on business cards, flyers, and magnets. To date, these commitments have been a major inhibitor to people changing phone numbers, but number portability means we can approach Vodafone or Telecom [and negotiate] as a whole business. So we are quite excited about it,” says Hooper.

Put simply, number portability allows mobile phone customers with a 021 or 027 number to swap between mobile network providers whilst keeping the same phone number. So you can move to the Vodafone network and become a Vodafone customer but keep your Telecom 027 number and vice versa. When the number is transferred (called ‘porting'), the “losing” network service provider is required to immediately stop providing services associated with that number.

Vodafone plans to take number portability one step further by offering customers who use only a mobile phone in the home the opportunity to assign that mobile a local landline calling number - such as 09 123 4567. Hamish Sansom, head of new product development for Vodafone, says when the new service is available Vodafone customers will be able to allocate a landline number and a mobile phone number to the same mobile phone. If someone calls the mobile phone using the mobile number the caller will be charged for a mobile call but if they call the phone using a local or landline number they will be charged at local landline rates. This means someone calling from a Wellington landline to a mobile phone on a local Auckland phone number will pay the normal Wellington to Auckland landline call rate.

The catch is that customers who move a local number to a mobile phone will need to give up their landline connection as the local number can only be allocated to one connection – however, this fits in nicely with Vodafone’s wider plans for home and business telephony.

“A Vodafone customer will be able to cut their landline, save a bundle, still be able to make and receive calls on their local number, and friends or business contacts will notice no change in the price they pay. Our goal is to be in a position to say: why bother with a landline when you can have your local number and mobile number on one mobile phone?” says Sansom. (However, he agrees consumers and businesses will still need a landline connection if they are heavy Internet users or have no mobile coverage.)

Phil Patel, marketing director for Vodafone, says number portability gives consumers freedom of choice and is particularly valuable for businesses which have mobile numbers on business signage and stationary or locked into the speed dial and contact management systems of customers and business partners – having to change a mobile number can be very disruptive and cost money.

“We have had customers that would be [financially] better off by 20 per cent if they could change networks, yet they don’t even consider it because of the cost [to their business] and the hassle. Now we can assist them by giving them a GSM phone and they can keep their existing 027 number,” says Patel.

Within that statement there’s an important point: whilst you can take your phone number with you, you will need a new mobile phone or smart phone when you change mobile networks. So you can expect both Vodafone and Telecom to start putting together some attractive mobile handset packages following April 1st in an effort to win business from each other. For example, Patel says the majority of new Vodafone on-account customers will not have to buy a new handset and some Vodafone customers on low-end business plans already get free 3G phones.

“We’re also looking a new bundle on the back of a great buy price from one of our hardware vendors offering three months free access along with the hardware,” says Patel.

He says Vodafone plans to do everything it can to win the connection war which is why its primary focus around number portability has been on increasing customer service levels to coincide with the months leading up to April 1st.

Meanwhile Kevin Bowler, general manager of consumer for Telecom, says number portability is something Telecom has been actively working on for the past two years and turning number portability ‘on’ has been Telecom’s job. Bowler says while this process was “complicated” Telecom is confident number portability will operate smoothly from April 1st – and that Telecom will benefit from it.

“We expect to win Vodafone customers. We have outgrown Vodafone in eight of the last nine quarters in terms of connection growth per quarter and number portability will enhance our competitiveness,” says Bowler. He predicts there will be a short term increase in the number of people moving between networks and says customers moving from Vodafone to Telecom will be able to buy any phone the Telecom range, including a $299 Samsung World Mode phone which works on the Telecom network in New Zealand and international GSM networks overseas. However, Telecom will not offer customers the chance to assign a local calling number and a mobile number to a mobile phone, says Bowler.

Bowler is also less inclined than Vodafone to promise free handsets for ‘porting’ customers, saying Telecom prices business phones on a “case by case” basis. But he says Telecom has free phone offers in the market and is building a service layer for World Mode phones to seamlessly roam. (At the moment the World Mode phone changes networks internationally via an active divert that the customer must initiate.)

The number portability battle, though predicted to be brief, is likely to be fierce – Clause 4.1.4 of the LMNP Terms which form part of the Number Portability Determination, stipulates customer information provided in the network change process can only be used in conjunction with the delivery of telecommunications services and can’t be used for “win back” or marketing purposes. So once say Telecom wins a customer from Vodafone; then Vodafone can’t directly try to win that customer back to its network. Instead, both Telcos will have to rely on advertising and new packages to entice customers back. Sounds like fun – particularly for consumers and businesses.

For more information visit the Mobile Business Research Pavilion

April 2007

By Vikki Bland