This article was first published online on 3rd September 2011 and is republished without edit or unpdate in light of recent moves to effect MNP in Jamaica. 

Set to heat up mobile market in Jamaica and the region

“Subscribers usually churn if they are unhappy with an operator’s customer care, service portfolio or unattractive tariff rates. For that reason, building a strong brand and forging close relationships with existing customers are the fundamentals in overcoming churn.”
Digicel, LIME and CLARO according to Brand Strategist Aldo,should begin to prepare themselves for an increase in customer churn and the possibility of a price war when mobile number portability (MNP) becomes a reality. This he believes is where the next level of competition will go once CLARO has completed its network upgrade and has leveled the technological play field. He is of the view that CLARO will seek to press the Government to introduce a Mobile Number Portability policy, and they will get the support of consumers also. Aldo is of the view that with over 1.8 million subscribers Digicel LIME with 800 thousand subscribers will have the most to lose. CLARO has about 300,000 subscribers their challenge will be to grow the others will be to hold on to their subscribers.

Mobile Number Portability (MNP) enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile network operator to another.

“The provider more likely to get ahead of the game will be the one who aligns MNP with their service offerings in such a way that it makes a positive difference for their subscribers.” He asserts. “MNP has the effect of increasing subscriber choice and maximizing competition.”

The introduction of MNP in many other mature cellular markets has increased churn rates since it gives consumers the ability to change service providers without changing their cell phone numbers.

The threat for Jamaican Mobile operators is that Government Regulators may use it as a tool to force prices down in a low income-earning market such as Jamaica and create opportunities to licence more operators.

“We are going to see a marketing frenzy take place as the Jamaican operators seek to out manoeuvre each other with cheaper and more innovative price packages, forcing prices down, consumers will have a field day.” Aldo commented further.

Many subscribers in countries such as Jamaica and the Caribbean where handset subsidies are prevalent are likely to form part of a “grab and go” trend, joining one operator for a new, trendy phone and then migrating to another that offers the best pricing or most attractive services.

In Jamaica, voice remains the killer application and only two things matter to the average consumer – lowest prices and trendiest handset. While handset grab and go may take off among contract subscribers, in Jamaica as around the Caribbean most subscribers are on prepaid packages and will follow the operators with the cheapest prices.

Unlocking Phones

A number of operators have placed software programmes in all their phones to stop subscribers using them with any other network’s SIM in them. This is currently the case with Digicel and LIME GSM phone sets, it is called the SIM lock or SP lock, but they can be removed. In some markets where this is legally allowed the network will make a charge for issuing the release code. In Jamaica a virtual business model has evolved involving individuals and third-party companies that unlock handsets more cheaply. Phone sets unlocked so far are mostly out of the US, it is not clear if the Digicel and bMobile can be unlocked by these individuals. But it’s only a matter of time before some enterprising Jamaican figures out how to do it.

Aldo is of the view that as experienced in more developed markets, “MNP strategies based on defensive or negative tactics are likely to fail. The strategic move to make is to simply regard MNP as a new addition to their service portfolios. There’s no point fighting it, it’s going to come, so just deal with it. As a matter of fact the operator that moves first on this will have a distinct advantage and claim ownership of the initiative and claim to have revolutionized the market once again”

As in all open markets where competition thrives subscribers will churn or migrate if they are unhappy with an operator’s customer care, service portfolio or unattractive tariff rates. The best defensive mechanism against this is to build a strong brand and forge close relationships with existing subscribers.

It was recently reported that Cable and Wireless had to write off a substantial amount of uncollected phone bills following the rapid introduction of competitive mobile service. In the absence of any agreed systems and methods for new customer acquisitions, new operators were only too happy to accept customers from existing operators even if they were leaving those operators with unpaid bills.
For MNP to work effectively and for each operator’s revenue to be protected it’s clear that an agreed policy will have to be agreed upon between the operators. It’s therefore expected that new accounts will only be opened after a credit check. Providing there are no outstanding bills payable to your old account, the request is processed between your old and new networks, and the customer given a date of transfer of the number.

Going Forward

Going forward it’s clear that operators will need to assess their growth strategy as their markets start to saturate and the importance of customer retention increases. To overcome increased market demands and the impact it will have on the service layer, operators are advised to look deep into traffic and revenue growth, focusing on greater customer segmentation and Value Added Services (VAS) portfolios as a means to subscriber retention. The key to MNP is to align it as a service for advanced subscribers and business users and to augment the specific GSM/GPRS traffic with, and in some markets, aggressively encourage fixed-mobile substitution. BM

PREVIOUSLY PUBLISHED IN BUSINESSUITE