Challenges of Mobile Number Portability Implementation in Emerging Markets

When examining the options to implement MNP, regulators and operators will look to take advantage of the experience of other countries. This enables them to develop a solution which mirrors international best practice whilst avoiding well documented miscalculations. It is often the case that emerging markets where competition is at its infancy faces unique conditions as compared to established markets where MNP have been introduced a decade ago. These conditions often include the following:

§ Relatively low penetration rates;

§ A high percentage of customers being prepaid;

§ Low to medium Average Revenue Per User (ARPU);

§ Customers tend to have prepaid services with multiple operators with resultant low churn rates;

§ Projected low porting rates;

§ A small number of competing operators;

§ Poor infrastructure roll-out into rural and/or remote areas.

This has often led these countries to the conclusion that introducing MNP is not viable, the predicted costs greatly outweighs the corresponding benefits (Oliver, 2009). In a paper delivered in 2007, in Islamabad, Pakistan, John Horrocks, an MNP expert, stated that; “costs-benefit analysis of portability process showed that implementing this service in smaller countries with populations of less than 10 million was not a feasible option, as the costs outweighed the benefits significantly”. However, there are now examples of countries successfully implementing MNP despite a projection of low porting rates because they have low populations (by international standards). These countries have had to be realistic about the cost effectiveness of the solution adopted. They have recognized the need to identify and utilize a low cost solution to overcome the absence of volume-related cost savings achieved in large established markets.