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Verizon Wireless, the No. 1 U.S. mobile carrier, appeared to be growing just one week after a new federal rule went into effect allowing consumers to keep their wireless phone numbers if they switch providers, analysts say.

As expected, Verizon Wireless appears to be attracting customers based on the perception of its network coverage and quality. T-Mobile USA appears to be gaining customers based on the perception of value, Merrill Lynch analyst Linda Mutschler said in a Dec. 1 research note. Also as expected, particularly for the New York area, the most commonly cited carriers from which customers are parting appear to be AT&T Wireless and Sprint PCS.

Analysts with Wachovia Securities made similar remarks in a Nov. 25 research note, citing Verizon Wireless as an early winner, explaining while we spoke only with a limited number of stores, most salespeople we spoke [to] said they received the most porting requests from users wanting to leave AT&T Wireless and Sprint PCS.

Verizon Wireless has declined to provide any hard numbers as to how many customers it has won or lost, but spokeswoman Brenda Raney says stores all reported above average business on [Nov. 24], the day WLNP took effect, and a majority were people looking to become Verizon Wireless customers from another carrier.

Overall, the initial level of requests to switch providers fell below analysts estimates. TSI Telecommunication Services Inc., a thirdparty provider of number portability for five of the six largest wireless carriers, says 80,000 porting requests were initiated Nov. 24. NeuStar Inc., the LNP administrator for North America, declined to provide any figures on the number of porting requests it logged the first week.

They [carriers] see a lot of extra attention but not a lot of people switching carriers, says Gerard Brikkenaar van Dijk, a spokesman for NumberPortability.com LLC, a New York company providing information about the issue.

Jeff Fugitt, director of marketing with Traqwireless Inc., a mobile communications management company working with the Fortune 1000, says about 60 percent of companies surveyed said they are likely or definitely going to port some numbers. But they are going to wait and let the system get all the kinks out before they do that. It is critical they dont have a hiccup in their wireless service, he adds.

Gartner Inc. advises in a report enterprises should wait until the first half of 2004 to move large groups of users to a new provider, permitting time for service providers to put the appropriate processes in place and … lessen the risk of loss of service and lost phone numbers.

Brikkenaar van Dijk says many consumers have complained on the Web site about AT&T Wireless. One disgruntled cell phone user says she and her husband made a request to switch from AT&T Wireless to Verizon on Nov. 24. As of Nov. 30, they still were unable to use the Verizon phones. I made a call to Verizon and per the Verizon rep, AT&T is having major system problems and has not responded to their request to release our phone numbers, Debbie Tague says.

An AT&T Wireless spokeswoman did not immediately return a phone call seeking comment on its ability to port numbers during the first week of WLNP.

Current Analysis analyst Eddie Hold says fourth quarter results should shed some light on how wireless carriers are faring. The fourth quarter is definitely the time when there are more people coming out of contract than there would be in any other quarter, says Hold.

Jeff Kagan, an independent telecommunications analyst, cautions against judging the winners and losers too soon. This is a work in progress and will continue to be for the next year, he says. Companies will learn a lot from their wins and losses and make changes in their marketing efforts.

I dont expect the best deals and most aggressive marketing until after the first wave of early switchers are done and after the annual holiday rush, adds Kagan. We may be able to start getting a better idea after the first of the year.

Analysts with RBC Capital Markets report in Dec. 1 study WLNPs impact on churn  the percent of customers ditching their current provider q should become evident only after the wireless carriers post their first- and second-quarter results for the 2004 fiscal year.

Some analysts say LNP will erode earnings in the wireless industry, but possibly create a wider gap between the weak and the strong. We will not know for weeks, months or even a year whether there are any structural changes to the wireless industry and business model, analysts with J.P. Morgan Securities Inc. wrote in a Nov. 25 research note.


BETTER SAFE THAN SLAMMING

Spurred by wireless number portability, VoiceLog LLC rolled out a speech recognition-based third-party verification package that lets wireless carriers confirm customers decisions to move their wireless number from one service to another.

VoiceLog says the program gives wireless carriers a tool to document customer change requests as a safeguard against slamming complaints by competitors, customers, or state and federal consumer protection agencies. Although federal regulations exempt commercial mobile radio services (a category that includes cellular and PCS carriers) from verification requirements as long as they are not required to provide equal access to common carriers for the provision of telephone toll services, VoiceLog says portability increases the potential for unauthorized service changes.

VoiceLog also offers a TPV variation to satisfy the federal E-Sign Act, which makes electronic signatures as valid and binding as traditional signatures. VoiceLog allows a customer to sign an electronic cellular service contract via the phone, without requiring a physical signature. Wireless TPV starts at 50 cents per order, but service providers that offer bundles of local, long distance and wireless will benefit from special discounts.

SURVEY SAYS …

How many consumers will switch wireless carriers? Depends on which poll you believe. Here are some predictions.

  • InsightExpress surveyed 600 cell phone users in November 2003 and found 31 percent say they will change wireless operators when their contracts expire.
  • A nationwide study conducted by Synovate found 73 percent of cell phone users said they knew about the FCC policy, but less than one in five claimed they were extremely or very likely to switch.
  • A September poll of 111 senior IT executives of Fortune 1000 companies revealed 84 percent likely would change their carrier if they could keep their current cell phone numbers. The poll was conducted at PARTNERS, the annual Teradata Users Conference in Seattle.
  • Zelos Group posits WLNP will yield another 3 percent to 6 percent in additional annualized churn in 2004.
  • TNS Telecoms found 27 percent of households with a wireless phone are likely to switch within the next year even without even being offered a lower price by a competing carrier. When offered a 10 percent discount, the percentage of households likely to switch jumps to 62 percent and to 73 percent for a 20 percent discount.

PORT CUSTOMER PHONE BOOKS, TOO

With an eye to increased service churn in the wireless sector due to portability, FutureDial Inc. has launched the Cellphone Service Station (CSS), a software application for transferring phone book and contact information between more than 140 mobile phone models.

Even though they can keep their same phone number, subscribers who switch cellular carriers often must change handsets too. Those who keep important contacts in their mobile phone books can use CSS to avoid re-keying the information.

Losing phonebook information when upgrading handsets has always been a problem facing consumers. [Wireless number portability] creates urgency for wireless carriers, retailers and corporations to find a solution, says Christopher Waldo, vice president of sales and marketing for FutureDial. Cellphone Service Station provides a productive business tool to turn that issue into a benefit.

Available for license directly from FutureDial and its authorized distributor Brightpoint Inc., the service is targeted to wireless carriers, retailers and corporations. CSS supports phones from Sprint PCS, Verizon Wireless, AT&T Wireless, Cingular Wireless, T-Mobile USA Inc. and MetroPCS. As new mobile phones are launched into the market, FutureDial provides software updates through Web downloads.

Carriers can use CSS as a competitive differentiator, while wireless retailers can offer phone book swapping services at customer service desks as a value-added service, says a company spokesperson. Besides porting phone book information, CSS allows backup and restoration of phone books in case of theft, loss or damage, and lets users print out reference copies of phone book information.

PhonemagTeam

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