WIRELESS INDUSTRY GETTING ANXIOUS OVER NUMBER PORTABILITY RULING

The FCC will decide the fate of wireless number portability requirements, and industry lobbying forces are hitting the pavement hard, trying to persuade the FCC to drop or postpone the mandate, which would let wireless subscribers keep their phone numbers when they switch providers beginning Nov. 24.

Most major operators want the rule lifted, arguing that it is too costly and the competition WNP is supposed to create already exists. In addition, they claim no hard evidence exists to prove that consumers overwhelmingly want the service. The Cellular Telecommunications & Internet Association recently told the commission it has serious concerns about the ability of the Number Portability Administration Center to handle the volume of number ports that will result from WNP. Government agencies, consumer advocates and wireless resellers, however, want the FCC to move ahead with WNP.

It's an issue the financial community is beginning to fear at a time when wireless is one of the few bright spots in the telecom market.

“This is not the time to implement a feature that will cost carriers additional money.” said Timothy O'Neil, wireless analyst with SoundView Technology Group.

Sprint PCS has told the FCC that WNP will cost the company $52.7 million annually. That works out to about 30¢ per month the carrier would have to charge its customers, said Adam Guy, senior analyst with The Strategis Group.

Carriers, though, are most afraid of churn costs. Indeed, a recent survey conducted by NightFire Software and Harris Interactive showed that a majority of adults want WNP (see figure).

Among major carriers, only Nextel and Leap Wireless, which have a sufficiently differentiated product, want WNP. “Because we have no contracts, our customer loyalty is dependent on how we treat them,” said Dan Pegg, senior vice president of public affairs with Leap Wireless.

Industry watchers say they would be surprised if the FCC eliminates WNP altogether due to consumer pressure. The FCC is more likely to delay the November deadline by at least six months because carriers must meet both the requirement for WNP and number pooling, which changes the way phone numbers are allocated to slow the exhaustion of area codes.