Port or Perish

No issue will affect wireless providers, in terms of cost and labor, more than wireless number portability (WNP) over the next two years. When all is said and done, providers may have spent more than a billion dollars to implement a system that might drastically change the landscape of the already cut-throat competitive industry. WNP affects all aspects of provider operation: billing, networks, switches, number administration and churn rates. Mix all these well, and it just might work. WNP is a complicated matter and will require extensive testing; providers need to stop delaying and select their WNP solution now if they hope to meet the November 2002 deadline. The WNP requirement is here to stay. If providers do not move toward WNP now, their business may port away.

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It's gut-check time for providers menaced by WNP. Enter the darkness if you want to come out in the light.

No matter how warm and comfy you are with dreams of wireless data, increased penetration and higher average-revenue-per-user (ARPU) rates, you no longer can hit the snooze button when it comes to wireless number portability (WNP). With the implementation deadline little more than two years away, the time to choose your solution is now. After Nov. 24, 2002, competition will become more intense, and customers will hold more freedom than ever before. Inert providers will face a rude awakening. Those who act now can position themselves to hit the ground running.

Learning to Live With WNP
For years, WNP has been the uninvited house guest that just won't go away. There have been more than audible discussions from the wireless industry about the portability mandate. Bell Atlantic Mobile, now Verizon, was an outspoken critic, even calling for dismissal of the requirement. Omnipoint, now VoiceStream, stood as one of WNP's few proponents. The company even told the FCC it would not need a deadline extension. The FCC granted the industry forbearance in February 1999, pushing the deadline back to the current 2002 date. WorldCom and the Pennsylvania Public Utility Commission were among the few who opposed the extension, stating that the delay would hinder the development of number pooling. Do not look for additional time, though; an FCC official stated that the commission would not grant another extension. Furthermore, any calls for termination of the portability mandate will fall on deaf ears: "It's highly unlikely that we'd entertain it," he said. "I don't seen any basis for that."

Lori Messing, CTIA director of numbering issues, said that WNP has "never been a popular mandate, but there are no open motions to kill it at the FCC." So, while the wireless industry is not going to throw its arms around portability any time soon, service providers have begun to accept the requirement slowly.

"With the FCC mandate, all the arguments are over," said Jim Naumann, U.S. Cellular director of network engineering.

That does not mean, however, that providers are open to discussion about WNP; of the eight wireless-service providers contacted for this article, seven declined comment, including SBC Wireless, Sprint PCS and Verizon Wireless.

You Missed the Starting Gun
Today. That's how soon Maggie Lee, Illuminet senior technical analyst for number portability, believes wireless-service providers should select their WNP solutions. Bryan Mordecai, Telcordia director of product marketing, has met with numerous wireless providers to pitch his company's solution and "encourage them to get started in this process right now."

Despite this need, Lee believes that there are providers, especially those who are not involved with industry committees on WNP, who are all too far behind in the implementation process.

"My own sense is that if they don't act quickly and start to decide at least what they want and how they're going to implement it by the end of this year, then there's going to be a problem with being ready for Nov. 24, 2002," she said.

The shame in such procrastination is that in the race toward number portability, the wireless industry gained a significant head start from the experience of wireline-service providers. With the bulk of portability's technical challenges conquered in the wireline process, wireless vendors and providers were able to focus on the challenges unique to WNP, such as the separation of the mobile directory number (MDN) and the MIN. Furthermore, wireline's mistakes became wireless' wisdom. Mordecai believes that the wireline process taught the wireless industry to build a detailed implementation schedule with plenty of time to "make sure that every opportunity is given to get this thing right the first time."

Crafted by the WNP Subcommittee, (see Figure 1) the WNP timeline calls for service providers to initiate internal testing by February 2001. That means providers have less than half a year to choose their solutions. Testing will progress to include the Number Portability Administration Center (NPAC), the database that gets queried to locate all ported numbers, by May 2001. Successful work with the NPAC leads to intercarrier testing in October 2001. Eight months of testing later, providers should deploy their solutions by June 2002, with WNP available just in time for Thanksgiving 2002. On paper, this schedule may appear to grant a surplus of time, but Messing does not foresee smooth sailing up to the deadline.

	Start Date	End Date
Intercarrier communications process document	3/00	3/00
Intercarrier test plan completes	6/00	6/00
Company-specific functional requirement specifications complete for internal development	4/00	4/00
Company-specific system development	5/00	1/01
Internal testing	2/01	5/01
NPAC turn-up testing	5/01	9/01
Intercarrier testing	10/01	6/02
Deployment	6/02	9/01
Mandated WNP implementation		11/24/02

Figure 1. WNP implementation schedule as drafted by the WNP Subcommittee for NANC

"When you take into account having to implement seamless roaming, it's going to be very difficult to make the existing deadline," she said. "I anticipate that we're going to go down to the wire."

Other, more immediate, concerns undoubtedly will continue to tax service-provider resources as well; the business of America's most active industry will not stand aside for portability. Providers who burn the midnight oil should not make excuses to the FCC.

"I don't think that we would be sympathetic to an eleventh-hour request to push the deadline back," forewarned an FCC official. To make matters even more complicated, WNP must be available on a national scale at the same time. While wireline portability eased into the top 100 MSAs on a gradual timeline, wireless by its very nature demands that WNP must work from coast to coast in the same instant.

Money is the ultimate language for all business. In the end, then, it may be bills for dip charges that compel service providers to act on WNP. Phase I of WNP required all wireless providers to be able to terminate calls to ported wireline numbers correctly. To do so, providers could perform their own database queries, employ a service bureau to do the dips for them or default to the LEC for the lookups. All three options are expensive. Providers who chose to default to the LEC face the greatest long-term cost; dip charges vary but most fall between 0.009 cents and 1 cent. These rates can add up quickly to six figures, especially given that when one person in a block ports, the entire block gets designated as ported. That means that even if only one out of 10,000 people ports his number, every call to that block requires a database dip. Rob Smith, product manager for SS7 database products with GTE TSI, knows firsthand the connection between dip bills and interest in WNP.

"Now they're starting to inquire much more heavily about it because they're starting to get bills from the ILECs for default routing," Smith said.

Nearly nine million wireline numbers have been ported as of the end of June. That number has begun to steam roll this year — in only six months there have been only one million fewer ports than in the last two years combined — and Marc Abbott, Evolving Systems vice president of marketing, believes that pace will only continue to quicken.

"By the time the wireless industry can port, I expect that (number) to be over 25 million easily," said Abbott.

With wireline portability rapidly gaining in popularity, how long will it be before you get requests from other providers' customers wanting to switch, but only if they can keep their numbers? By 2002, there may be a substantial pent-up demand for WNP. Customers anxious to port to a new service provider as soon as the service becomes available could hit brand new systems like a tsunami.

"That's something that would scare the heck out of me: It could break before I find out if it works or not," Abbott related.

Donna Hildebrand, Tekelec senior product manager for the STP/LNP product line, believes that WNP will have instant popularity with consumers.

"When (WNP) comes on, it's going to be a big hit," she said. "The numbers will go up drastically."

There are, of course, different levels of procrastination among service providers. Abbott acknowledged that Evolving Systems, which manufactures the software used by the NPAC, has "had conversations with the larger carriers." He predicts providers will select their solutions during the third and fourth quarters of this year.

"I expect to see our name at the top of a number of them," he iterated.

Ben Levitan, manager of technology standards for GTE TSI, noted that providers chiefly are concerned about call-setup time. Time for database dips may delay the call connection.

"Everybody is really concerned about maintaining high quality service to their customers," Levitan explained.

When asked what concerns service providers raise in talking with Illuminet, Lee's succinct reply was "everything." Only a handful of providers understand WNP; most of the smaller providers, who are not involved in industry WNP groups, require an explanation that starts "from square one," she said.

Mordecai described Telcordia as in a "wrap-up mode" with service providers. He related that his company has received RFPs and expects more to be coming in soon. He said providers are concerned with the ability of the WNP solution "to interface successfully with the surrounding OS systems that already exist."

U.S. Cellular appears to be leaning toward building its own solution rather than buying one from a vendor, according to Naumann. He listed several reasons for this strategy including use of capital expense, complete control of the database lookups and porting, and the lease vs. buy cost aspect. Also, it would "give us the experience of doing it ourselves rather than relying on another," he explained. Naumann also said that U.S. Cellular is "looking out five to 10 years" for its WNP business plan. The service provider certainly is taking its time with the choice as well.

"The first of next year is when I think we're going to make a final decision," said Naumann.

WNP for WNP's Sake
The Yankee Group's report, Wireless Number Portability: A Bowl of Cherries for Competition . . . but Just the Pits for Everyone Else?, estimates that providers may spend up to $1 billion to upgrade for portability, with "significant ongoing costs" thereafter. For network upgrades alone, service providers may spend at least $14 per subscriber. That amount could skyrocket if providers begin to market more aggressively in order to retain subscribers. Therein may reside the worst fear of wireless portability. The report said that "the level of churn within the wireless industry could significantly rise unless carriers learn how to retain their customers more effectively." With churn rates already at an average of 30% annually, portability may push that rate to full throttle. Such a warp-speed revolving door likely will strain systems and blood pressures alike. Naumann acknowledged that churn comes up in U.S. Cellular's WNP strategic discussions. Abbott summarized service providers' dilemma: "What they are faced with doing is implementing a technology which will cost them money, which will increase the churn rate, which will cost them money."

Should churn rates reach for the stars, providers will have to come up with new ways to retain their subscribers and compete with each other. Customer loyalty soon may top every provider's wish list. Service quality, rates and customer care may top the vanguard by which customers select a service provider. Competition may eclipse all previous levels and prices could reach new lows as customers hop from one service provider to another, seizing the day's best deal. One might wonder if WNP would bring about the return of contracts.

Throw a pebble in a pond and the ripples will expand until they reach the shore. WNP derives its monumental cost because it will affect providers in the same way; only this is no pebble. By the time portability is ready to roll out, nearly every aspect of a provider's operation will have felt the tidal wave. Databases must accommodate the separation of MDN and MIN; billing faces the same problem. SS7 connections will need to upgrade to handle more database dips. Switches will need enhancement to determine if the NPA-NXX is a ported range. The list goes on and on. Bryan Mordecai, Telcordia director of product marketing, warns service providers, "The devil is in the detail, and this is detailed."

How much of this endeavor providers will recover from their customers is unknown. What they will charge, however, will be entirely up to them.

"We don't have any regulation of charges for WNP," an FCC official said. What makes this financial burden even more taxing is that there exists no easy application of WNP for profit. While the necessary network upgrades will benefit other aspects of operation, and portability will allow service providers to jump into number pooling, service providers have yet to turn portability to their advantage as they will with the location-based technology going into E-911.

The Phantom Hope
Before WNP makes you declare "the end is nigh," read this story:

Sherman Popper just subscribed to No Jack PCS. This self-employed entrepreneur always has worked out of his home, but his business began to put him on the road for 10 hours a day. His wireless phone has become crucial to his job and busy lifestyle. He pays more than $50 a month for landline service that he rarely uses. He would love to have only one phone bill but doesn't want to lose his home number that is printed on business cards. Can you help?

Therein resides the best hope for WNP's potential.

"The saving grace, if there is one at all, is that it will be possible to move a wireline number onto a wireless phone," related Evolving Systems' Abbott. With WNP, wireless providers will be able to attract landline customers who want to go totally wireless. Naumann emphasized that WNP gives U.S. Cellular "an avenue to add customers, especially wireline customers that have had their phone numbers for so long. That's always been the hardest part about getting a customer to switch from landline to mobile." WNP might allow service providers to gain customers from each other, but the trick will be retaining them. In the end, Sherman's story represents the ultimate application of WNP. When the wireless phone number becomes as vital as its wireline counterpart, WNP will allow landline customers to cut their wires. If the wireless industry can use WNP to bring in the masses, it may be worth every dollar and every headache over the next two years. History may then vindicate WNP as an angel that came in disguise.

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Port to Pool

If wireless providers already did not have enough incentive to implement wireless number portability (WNP), the FCC has made portability and number pooling mutually exclusive. Service providers that want pooled numbers must first be able to port numbers because "the technical platform is the same," an FCC official said. The capacity for number pooling will be required in the top 100 MSAs by Nov. 24, 2002. Afterwards pooling will appear in other markets if requested by a service provider.

Given the current starvation of phone numbers, pooling looks to become quite popular. The only question is how soon the wireless providers will be required to pool numbers. The FCC is considering whether to require pooling at the same time as WNP or to grant the wireless-service providers a short transition period, possibly three to six months. A decision on this matter should come later this year.

The commission will have no sympathy, though, for any provider that doesn't meet the WNP deadline and wants new numbers.

An FCC official said that the commission would instruct NANC to deny the numbers. "With that hanging over their heads, I think the carriers would be well-advised to comply with the rules," he said.

Jim Naumann, U.S. Cellular director of network engineering, called number pooling a definite incentive for implementing WNP, especially given his company's rural endeavors.

"We might be in an area where we can't sell 10,000 numbers," he said. "So whatever the difference is gets wasted." Number pooling also will help providers enter markets where numbers have been hoarded by existing providers.

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WNP Overseas

If you want a possible indicator of how wireless number portability (WNP) will change the industry, then look overseas, where wireless customers already can port their numbers. In the United Kingdom, where nearly half of adults own a wireless phone, WNP has been in place since November 1999. Oftel, the telecommunications regulator for the United Kingdom, originally mandated wireless portability to increase competition between wireless providers.

Steven Day, Virgin Mobile head of media relations, noted that portability is catching on only slowly.

"Most consumers see the idea of getting a new phone as the idea of getting a new number," he said.

Day believes that will change soon, however, as consumers become more aware of the feature and more attached to their phone numbers. Porting soon will become much easier as well. Now, Oftel requires wireless providers to port a customer's number within 28 days. In September, that process will speed up to between seven to 10 days, as customers will be able to change providers and port their numbers via the Internet. Virgin's long-term goal is to reduce the transfer time to two days at most. There is no charge for this service, nor do customers pay WNP fees; Virgin Mobile only charges its customers for the calls they make. Virgin plans to begin advertising portability in the near future.

"We expect a very significant amount once we start advertising," noted Day.

Day did reveal that American companies have asked Virgin about its WNP abilities, but did not disclose specific names. A key difference does exist on the other side of the Atlantic, though; providers in the United Kingdom are not able to port between wireline and wireless and are not looking to do so any time soon.

Although Virgin does acknowledge that portability allows customers to be more "promiscuous," Day expressed that Virgin does not fear an increase in churn rates.

"We believe that it's a fear for the other companies rather than a fear for us because most people are coming to us over the existing player," he said.

Overall, Virgin Mobile has embraced WNP for its ability to attract new customers.

"We're very encouraging of it," Day said.

In Hong Kong, where there are more than three million mobile-phone users, providers are coming up with a variety of ways to build customer loyalty. Last year, just as WNP became available, service providers began to give away money, noodles and free minutes. Hongkong Telecom promotes its "free lunch" deal, a 3-month program that gives customers free local lunchtime calls and lunch.