Oscar The Grouch,Mar 14 2007, 11:18 AM Wrote:Is there a media release for this? Paolo, can you post this?
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Have phone, will travel --even if it's a land line
Number portability
Peter Nowak, Financial Post
Published: Friday, March 09, 2007
Home-phone providers are expected to take a hit when wireless number portability takes effect next week as customers will be able to take their digits and go cellphone-only -- just like Minister of Industry Maxime Bernier.
Wireless number portability, where cellphone subscribers can keep their phone numbers with them when switching providers, takes effect nationally on Wednesday and will affect about 70% of Canadians.
But one aspect that has not been well publicized is that portability will include land lines and not just cellphones, so customers will be able to move their home number onto a mobile.
Moving a wireless number to another provider will take 2.5 hours while porting a land line to a mobile or vice versa will take up to two days, according to Canadian Wireless Telecommunications Association spokesman Marc Choma. Canada is only the second country in the world to include land lines, following the United States, he said.
Some analysts expect portability will result in faster erosion of land lines at the major providers, such as Canada's two biggest phone companies, BCE Inc. and Telus Corp.
"It will accelerate. Not being able to port your land line number to wireless has been an impediment [to going cellphone-only] in the past," said Genuity Capital Markets analyst Dvai Ghose.
"There is a big opportunity here for wireless in displacement of wire line."
BCE's Bell Canada unit has been facing steady land line erosion over the past few years, losing 525,000 access lines, or 4.2% of its total, in 2006, up from 2.5% a year earlier. Telus lost 143,000 lines in 2006, or 3% of its total.
Since all three major wireless carriers in Canada also offer wire lines, the beneficiaries of any increased land line erosion, ironically, will be those more heavily skewed toward mobiles --namely, Rogers Communications Inc. and Telus.
"It's like robbing from Peter to give to Paul," Mr. Ghose said.
Not all analysts believe number portability will speed land line loss, however. "The type of person who is looking to drop their wire line service is not waiting for number portability, they're already moved," said National Bank Financial analyst Greg McDonald. "I don't think that's a big part of the market."
Among those who have already gone mobile-only are Mr. Bernier and his deputy minister Richard Dicerni, who did so because they are always on the move, the Minister's press secretary said yesterday.
Analysts expect the impact to be much more muted when it comes to wireless customers switching to other wireless providers. Number portability was agreed on in September, 2005, so Bell, Rogers and Telus are well prepared both technologically and with customer retention strategies for their total 17.5 million subscribers.
An estimated 80% of customers have been signed up to two- or three-year contracts, and many of those subscribe to bundled services that include television or Internet. The carriers have also already done most of their customer-acquisition spending, Mr. MacDonald said. These factors mean there shouldn't be any material changes in customer switching, or churn, or in cost of acquisition.
There could be some movement among business customers, however.
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