Number portability to consolidate in region in 2010

For more than one year, Latin American region has shown the way for number portability after its implementation in its two main markets: Brazil and Mexico in 2008; some months ago, the Dominican Republic and Ecuador have joined them. However, this system deployment will really consolidate throughout the entire region in 2010, after being implemented in several countries.

Being effective in Europe and the United States for several years now, number portability in Latin America has suffered the typical problems undergone historically by any other system and standard that enable greater competition in markets and strengthen the freedom of choice utilities user should enjoy. Thus, number portability has overcome uncountable problems before being established in different markets of the region.

As an example Mexico’s case can be mentioned: portability background dates 1995, when articlen 44, section V of the Federal Communications Act included the provision by which public telecom network dealers should enable portability of telephone numbers. However, only by end of 2006, the COFETEL, Consejo Federal de Telecomunicaciones (Telecom Regulator) took first steps to deploy this system in the country, and it finally completed by June 2008.

Something similar happened in Argentina, where number portability was included in decree law No. 764 dated 2000, that established deregulation of telecom market.  After nine years since enactment of that regulation, it was still without regulation, until the beginning of this year, when Justice, accepting presentation made by a user, ordered to the Argentine State to rule the system in a 90-day term.

As a result of the analysis of number portability in different countries of the region, Mexico became the first one to start up the system, by mid-July 2008, taking an important step after having undergone several halts, specially from Telmex, the incumbent of that country.

After assessing what has happened in the first nine months since the implementation of this system, it was observed that Telmex has registered the most subscribers' opt-outs, with a total of almost 113,000 users less, out of which 42,000 were added to the new telephony services rendered by companies operating cable television system. It should be pointed out that besides customers captured from Telmex, cable companies also attracted users from other companies, reaching a total of 73,764 new lines quickly. On the other way round, during these nine months, Telmex received 20,540 new line requests out of which only 470 belonged to users that migrated from cable operators.

In this way, besides producing a positive effect over service quality, for example, a 10% reduction in average was also posted in Triple Play service price during 2008, according to a study carried out by COFETEL.

In all, according to data available as of June 2009, after one year of effectiveness, 807,657 users changed the operator keeping their numbers, figure quite low considering that the country has a total of more than 100 million users including fixed and mobile telephony.

Then, there is Brazil, where number portability has been established gradually since the beginning of September 2008, and it was finally completed during the beginning of March 2009, when the strategic city of Sao Paulo implemented the system. This was important since in the first seven months since the system implementation, portability had added 343,615 requests while in the following six months, that number rose to 1,223,435, as proof of a clear development, mainly caused by Sao Paulo’s entry, the beginning of an important advertising campaign and the effectiveness –as from May– of new procedures set forth by the Agencia Nacional de Telecomunicaciones, ANATEL (Telecom Regulator) to facilitate the transfer in case of prepaid cell phone users.

The Brazilian system is under ABR Telecom’s control, that was hired by providers and the change costs US$2.13 to users, which it is mostly subsidized by the operator receiving the change.  According to prevailing regulation, ABR Telecom has a 5-day term to carry out the change, which will be reduced to 3 days after one year of effectiveness.

In this case, although it is a system that has been growing through months, it is still low in comparison with other countries, considering that fixed and mobile markets add more than 200 million accesses.

After more than a year since its implementation, the system is mainly benefiting those operators that have focused their strategy on the corporate market, within which big operators stand out, GVT, Embratel and NetFone, which have managed to attract an important number of users that have decided to change company. In the case of GVT, for example, areas where this operator is present have captured an average of 36% of the number of users that changes company through portability system.