AUS: ACCC Mandates Mobile Number Portability

The Australian Competition and Consumer Commission has determined today that there should be full portability of mobile phone numbers in Australia. Mobile number portability is the ability of customers to change their mobile network provider and/or service provider while retaining the same mobile phone number.

"The ACCC has directed the Australian Communications Authority to set out rules in the numbering plan about mobile number portability from the earliest practicable date," ACCC Chairman, Professor Allan Fels, said today.

The mobile market is one of the high growth areas in the Australian telecommunications market. In mid-1999 Australia had a mobile telephone penetration rate of around 33 per cent with about 6.5 million mobile customers. It has been estimated that the mobile telephone penetration rate is likely to reach 40 to 45 per cent by the year 2001/2002 (that is, 8 to 9 million customers).

The ACCC has concluded that the provision of mobile number portability is in the interests of all users consumers young and old, small business users especially and all business users. Mobile number portability substantially lowers the costs of changing service provider and as a result gives consumers greater choice of products, services and pricing packages from a range of different providers.

"MNP is likely to be especially beneficial for small businesses and tradespeople who often spend considerable money and effort promoting their mobile phone numbers. Currently, the absence of MNP means that these mobile phone users cannot take advantage of the benefits of competition. MNP will allow small businesses to capitalise on the choice of mobile service provider that best meets their needs at the best price without the risk of losing customers through changing their mobile phone number".

Mobile number portability is also likely to increase competition, both at the wholesale and retail levels of the mobile market because suppliers of mobile services will now need to compete more aggressively by offering better products and new and innovative services and packages in order to retain existing customers and attract new customers.

"MNP will benefit customers of mobile services, including small businesses and other corporate users, because it will encourage carriers to offer better service and lower prices in order to maintain customers", he said.

The ACCC envisages that the ACA will work with industry and the Australian Communications Industry Forum to establish an industry process to resolve various issues including the network arrangements and possible technical solutions for MNP.

"The ACCC is keen to see these issues resolved quickly and through industry co-operation", he said. "Today's decision is important.

"However, it will be some time before users see the result. The ACCC would be concerned if the industry did not introduce mobile number portability within twelve to eighteen months".

The directions provide for the ACA to report to the ACCC at the end of each six month period on progress toward achieving mobile number portability by the implementation date.

A copy of the ACCC's report on mobile number portability and the directions to the ACA can be obtained from its web-site: http://www.accc.gov.au.

MR 186/99 1 October 1999

Background

Role of the ACCC and the legislative provisions

Under the Telecommunications Act 1997, the ACCC has statutory powers to direct the ACA in regard to number portability. In particular, the ACCC has the power to determine that mobile numbers are portable across different carriage service providers. The ACA cannot put rules about number portability in the numbering plan unless directed to do so by the ACCC, and any rules the ACA puts in the numbering plan regarding number portability must be consistent with any directions by the ACCC.

In making directions to the ACA on mobile number portability, the ACCC must have regard to whether MNP would promote the long-term interests of end-users of telecommunications carriage services or of other services provided by means of telecommunications carriage services.

In May 1999, the ACCC issued a discussion paper on MNP. Comments were sought from industry participants, other stakeholders (including end-users) and the public more generally on a range of issues associated with MNP.

These comments have been taken into consideration in assessing whether the ACCC should direct the ACA to set out rules about mobile number portability in the numbering plan.

The report examines, inter alia, the following key issues regarding MNP:

the long-term interests of end-users; functional requirements of mobile portability; network arrangements and possible technical solutions for MNP.

The long-term interests of end-users

The information available to the ACCC suggests the lack of MNP represents an impediment to competition by locking customers in to particular service providers and making it difficult for new entrants to attract these customers.

Customer surveys which have been conducted, for example, have found that about four times as many customers would switch GSM mobile providers with number portability available than would do so without portability.

The ACCC received evidence from a number of corporate users who suggested that the absence of MNP caused these large customers to be 'locked in' to a particular provider of mobile services. These submitters argued that the lack of MNP has led to a reduction in the range of competitive offerings for customers and provides significant market power to suppliers when negotiating contracts with users.

Based on the evidence provided, the ACCC considers that the provision of MNP will:

increase competition, both at the wholesale and retail levels; provide consumers with a greater choice of network provider; substantially lower the costs of porting numbers; and encourage more efficient investment in network infrastructure as competitors introduce new and innovative services to retain existing customers and attract new ones.

A large number of studies have been undertaken on the benefits of MNP which have all concluded that the benefits, including those set out above, outweigh the costs. The need for MNP has been acknowledged by all overseas regulators who have examined the benefits derived from MNP. Recently, regulators in the UK, USA, Europe and Hong Kong have concluded that MNP is required to promote competition and benefit consumers.

Functional requirements of mobile portability

Based on the evidence available, the ACCC considers that most customer transfer and operational issues have been resolved in overseas jurisdictions and that Australia can leverage off this work in implementing MNP, thus reducing the timeframes involved.

The ACCC considers that detailed implementation of these arrangements will need to be resolved through multilateral industry processes and in consultation with the ACA, as part of its role in setting an implementation date for MNP.

Network arrangements and possible technical solutions for MNP

Based on the evidence provided, the ACCC considers that:

as far as possible, a long term integrated approach to number portability which can cater for portability across different mobile technologies and between the fixed and mobile networks is preferred to short term, ad hoc solutions which can only provide portability within a single mobile technology; and number portability should be required across all current mobile technologies, excluding Analogue AMPS.

The ACCC believes that, ideally, the eventual solution to be adopted for the introduction of MNP is a matter for the industry, through the Australian Communications Industry Forum, to resolve in consultation with the ACA. This approach will ensure that all technical issues are explored in multilateral forums and that all affected parties have the opportunity to contribute to the eventual solution adopted. However, the ACCC is keen to ensure that these issues be resolved as quickly as possible and will be closely monitoring developments within the ACIF to ensure that mobile portability is achieved as soon as possible.

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