Mobile Number Portability:Case Finland

Timo Smura 06.10.2004

Slide 2Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

Outline

• Introduction– Terminology– MNP and stakeholders

• Regulation– Implementation status– European Union– United States

• Technical solutions– Database and routing methods

• Case Finland– Regulation, technical solution– Market impacts of MNP

• Conclusions

Slide 3Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

Introduction

• Mobile Number Portability (MNP)= the ability of mobile subscribers to switch between service

providers while retaining their original mobile phone numbers

• Number portability types:

Portability type

Service portability

Service provider portability

Location portability

Aka Operator portability

Geographic portability

Examples Fixed-to-mobile PSTN-to-ISDN

Mobile-to-mobile, fixed-to-fixed

Fixed number portability inside a local exchange area

Slide 4Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

MNP and stakeholders

• End-user– reduces switching costs– makes it more difficult for to know which network

one is calling to

• Network operator– additional costs: investments and labour

• Service operator– increases churn rates

Slide 5Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

EU regulation

• Universal Service Directive (2002/EC/22): Member states shall ensure that all subscribers of

publicly available telephone services, including mobile services, who so request can retain their number(s) independently of the undertaking providing the service

• Does not apply to fixed-to-mobile portability

• Member countries required to implement MNP by July 25, 2003.

Slide 6Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

US regulation

• Telecommunications Act of 1996:– each LEC has the duty to provide “the ability of users

of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another”

– Wireless Local Number Portability (WLNP)– Implemented in November 2003 / May 2004

Slide 7Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

MNP Implementation Status

1999 2000 2001 2002 2003 2004Hong KongU.K.Netherlands

1997 1998Singapore

SwitzerlandSpain

ItalyBelgiumGermany

DenmarkSwedenNorwayPortugalAustralia

FinlandFranceAustriaGreeceIrelandIcelandLuxembourg

LithuaniaSlovakiaSouth KoreaUSA (as whole)

Slide 8Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

Technical solutions

• Number portability database (NPDB)– keeps track of the ported numbers and their respective service

providers – centralized or distributed– typically managed by a consortium of mobile network

operators

• Routing methods– Call routing =>

– SMS and MMS differently

Direct routing Indirect routing

All callquery

Onwardrouting

Calldrop back

Queryon release

Slide 9Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

Case Finland

• MNP implemented in July 2003

• Exceptionally high number of ported numbers– Over 1000.000 in one year

• Market impacts?

• What makes Finland different from other countries?

0 %

5 %

10 %

15 %

20 %

25 %

Denmark Sweden Norway Finland

Sources: Numpac 2004, SNPAC 2004, NPT 2004, ITST 2004

Slide 10Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

Case Finland: Numpac Oy

• Manages the ”Master system”, i.e. the NPDB

• Owned by TeliaSonera, Elisa, Finnet, and Saunalahti

Receivingoperator

Donoroperator

Numpac

Yearly + monthly feeFee per ported number

Administrative feeper ported number

Yearly + monthly fee

Call Routing (Number ported from A to B):

MNP-related fees:

Source: Numpac, 2004

Slide 11Helsinki University of TechnologyNetworking Laboratory

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Market impacts

0

1000000

2000000

3000000

4000000

5000000

6000000

Q2/04Q1/04Q4/03Q3/03Q2/03Q1/03Q4/02Q3/02Q2/02

ACN + others

Saunalahti

Telia Finland

DNA

Elisa

TeliaSonera

MNP

0,00 %

10,00 %

20,00 %

30,00 %

40,00 %

50,00 %

Q2/04Q1/04Q4/03Q3/03Q2/03Q1/03Q4/02Q3/02Q2/02

Elisa

TeliaSonera

MNP

• Increased service operator market share– from 98.7% to 87.9%

• Increased churn– from 15% to 25% annual churn

Sources: Operator annual and quarterly reports

Slide 12Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

Reasons behind the MNP effect

• Price war– Competition on price instead of differentiated services

– Heavy marketing campaigns, free giveaways and airtime

• Ban on handset subsidies– As well as SIM-locked phones and long service contracts

• Single-rate call plans• Small number of prepaid customers• Easy and costless MNP process for end-users

Slide 13Helsinki University of TechnologyNetworking Laboratory

Timo Smura06.10.2004

Conclusion: Differentiate!

• MNP does not generate churn, it only removes one barrier from the way of free competition

• To keep the churn rates low, operators should offer unique and valuable mobile data services rather than carry on the price war

• Easier said than done?

Thank you!

Comments and questions, please