Will number switching cut corporate costs?
Telephone number porting rules that go into effect nationwide on Monday could finally give big businesses the upper hand in the cell phone contract negotiations.
The rules, the result of the same Federal Communications Commission regulations now in effect in about 70 percent of the country, will mean that now all U.S. cell phone subscribers will be able to take their numbers with them when changing carriers.
The change means that corporations will finally have the upper hand in cell phone contract negotiations, because they will be able to keep their numbers anywhere in the United States, said Nick Wray, vice president of cell phone consultants Teldata Control. In the past, businesses that supplied employees with cell phones were reluctant to change carriers because of the intangible impact from changing telephone numbers.
Wray expects carriers over the next three years to discount corporate cell phone bills by up to 50 percent to stay competitive, which is what happened in the 10 other countries that have implemented wireless local number portability. That's more than double the discount U.S. corporations now usually get, he said.
The first wave of price reductions could begin later this year, when about 35 percent of the nation's largest corporations put their cell phone contracts out to bid, he said.
Verizon Wireless executives, while not disclosing any price-cutting plans, said Friday they believe number porting rules will help them capture more of the corporate cell phone market.
"Over time, we see more activity in this sphere," said Verizon Wireless Vice President John Comisky.
While the corporate cell phone client may be getting the royal treatment, Cingular Wireless warns of a bumpy ride for the 90 percent of U.S. cell phone subscribers who don't get their bills reimbursed by their employer.
Cingular said many cell phone carriers operating outside the top 100 markets, where number porting was introduced in November, are processing number-switching requests manually, which could lead to delays in having an old phone number assigned to a new cell phone.
Cingular and other top-tier cell phone carriers use automated systems. The top six cell phone carriers, initially plagued by catastrophic glitches, now complete the telephone number porting process in less than 2.5 hours.
Compounding problems will be dozens of small rural telephone companies that have their state's permission not to comply with the rules--and hundreds of others that have pending waiver requests.
"We have a patchwork in the wireline side rather than this nice, nationwide picture where every customer could port," said Anne Hoskins, regulatory counsel for Verizon Wireless.