SWITCH TO NETWORK MIGRATIONS SETS STAGE FOR ALL-OUT CELLPHONE RIVALRY IN SOUTH AFRICA

Telecoms

Midnight on September 18 will be a traumatic time for SA's cellular network operators. For the first time in Africa customers can expect their existing phone number to be moved to another network without any dead time, dropped calls or messages that the number you have dialled is not available.

They will be entitled to go to sleep as an MTN customer and wake up as a Cell C customer without anybody noticing. They can expect a bill to arrive from their new network, and will feel rightly aggrieved if the abandoned operator messes up and bills them too. And anyone who switches on that first day can ask to move across in the hour beginning at 11.30pm.

That is some technical feat. Making it more complicated is the fact that the operators are utterly clueless about how many disgruntled customers want to defect and take their number with them. It may be hundreds. It may be millions.

Research house Synovate expects about 21% to switch -- a massive workload, given that SA has about 27-million cellphone users.

Mobile number portability is being introduced under pressure from the Independent Communications Authority of SA (Icasa) to give consumers more choice. Many customers grumble about their network, but stay put because of the hassle factor of losing their number.

"The process is highly technical," said Icasa councillor Nadia Bulbulia. "Although all parties en-visage a seamless process, experience in Europe shows that a big bang approach could have uninten-ded consequences and dash consumer confidence in the process."

Even now there is some muttering from the operators that they have too little time to test the system. And other questions remain.

One is how much it will cost consumers. Cell C wants it to be free. With fewer subscribers than MTN or Vodacom, it has fewer customers to lose and hopes its prices will encourage people to join its network. SA's newest operator Virgin Mobile will also gain. Its debut last week was perfect timing, as consumers assessing its offerings and giving it time to prove itself may sign up once their number can move with them.

The receiving operator can charge a consumer for joining its network, but it may prove economically foolish to do so. The losing operator cannot charge a customer for defecting but it may ask the winning operator to cover its costs. The scale of those fees is one point the operators are still fighting over, says Cell C's senior manager of carrier relations, Mike Falconer. There would be no collusion on whether to charge consumers, he says, and Cell C may offer the service for free.

The fact that Vodacom and MTN have more customers to lose and fewer to gain has made them reluctant to hurry the process along, according to industry sources.

Falconer declined to comment on whether any artificial hurdles were raised and diplomatically replied: "It's an area where we have worked very well together."

The delay was partly caused in choosing a technology company to set up the porting centre. Grintek won the tender and the cost has already topped R300m. "We operators don't discuss the kind of figures involved," says Vodacom's Mthobi Tyamzashe.

One issue worrying the industry is that porting will make it difficult to force customers to honour their contracts or meet all the payments on long-term deals that cover the cost of a "free" handset. At the moment, an operator can block a number to prevent users making calls if they have not paid their bill. Under the new rules, they cannot prevent a customer from reneging on a contract or block a number while they recover debts.

To avoid the predicted loss of customers, the networks may begin a price war and should certainly improve their customer care. "It is difficult to identify an overall winner once number portability is introduced," says Synovate MD Jon Salters.

Vodacom should gain more prepaid users than it loses, with the majority coming from MTN. For contract customers MTN's gains should exceed its losses by 2% as it wins customers from Vodacom.

Business Day