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Study: Business should mull portability costs

The tempation to switch cell phone providers may be too much for business customers in light of the new portability rule, but a report warns that the costs could be prohibitive.

Businesses planning to switch wireless service providers need to watch out for extra migration costs and service quality so they don't end up coughing up additional money rather than saving, Gartner said in a report Monday.

Gartner issued the warning as a new rule allowing customers to service-swap goes into effect. An estimated 30 million subscribers now have the option to switch wireless carriers for a better monthly plan or coverage area, and still retain their phone numbers.

Companies could save up to 35 percent of what they spend on wireless services by switching over to one provider, Gartner said. But the swap itself may be a costly affair--a possible tab of $300,000 in migration fees for companies that have 1,000 phones.

Gartner advised companies to wait roughly another six months, enough time to allow service companies to set their processes in order, and to mitigate any loss-of-service risk.

Most of the cost for migration--74 percent--will be attributed to the purchase of new handsets, accessories and batteries. Operational changes such as making directory and database updates will make up 16 percent of the cost. The remainder will be accounted for by administration and related costs, according to the market research firm.

"Before making the final decision to move a large user base, a major consideration for enterprises should be whether users would be happy with the new service," Phillip Redman, research vice president for Gartner said, in a statement. "Lower-cost services that don't offer the same coverage will cause a lot of unrest among users and may cost more in support calls and complaints.

Other things to consider, said the report, are contractual obligations enterprises have with current service providers and whether termination fees are involved."