1.1 An essential element in the health of the UK’s mobile market is the ability of consumers to choose between competing providers – and to switch between providers quickly and easily. When switching, consumers have the right – if they wish – to retain their mobile telephone number. The facility that enables consumers to retain their mobile telephone number whilst switching provider is called mobile number portability (or “MNP”).
1.2 This consultation sets out Ofcom’s evaluation of the current arrangements for the MNP process. We see certain problems with the current process and room to make the process work better for consumers. We also note the implications of the proposed new European Union (“EU”) Regulatory Framework for electronic communications which, if passed, would require the introduction of one working day porting, across the EU.
1.3 We set out a number of different options for change and we invite stakeholders to submit views and provide evidence about what steps, if any, we should take to change the process of porting mobile numbers in the UK.
1.4 In the UK, the current process for MNP is ‘donor-led’. This means that consumers are required to approach their existing operator for authority to take their mobile phone number to a new provider and consumers are responsible for passing on the Porting Authorisation Code (“PAC”) to their new provider. The current regulations relating to MNP are set out in General Condition 18 (“GC18”), which requires that MNP takes place within two working days from the point at which the consumer passes the PAC to their new provider.
1.5 The UK is almost unique within Europe in having an MNP process of this type. Most countries operate a “recipient-led” process. Under those arrangements, the transfer of a mobile number to a new network is dealt with by the new provider and there is no need for the consumer to contact their old provider in order to obtain a PAC, nor pass on the PAC to the new provider.
1.6 The length of time taken for the porting process to complete, and for calls to be routed to the new network, varies significantly within the EU.
1.7 Some questions dealt with in this consultation were the subject of an earlier decision by Ofcom that was set aside on appeal. On 29 November 2007, Ofcom published a statement entitled Telephone number portability for consumers switching suppliers (“the November 2007 Statement”) which required, amongst other things, mobile providers to implement recipient-led porting and reduce the time to port mobile numbers from two working days to two hours by 1 September 2009(-1-). Vodafone appealed the November 2007 Statement in early 2008, and on 18 September 2008 it this was set aside in its entirety by the Competition Appeal Tribunal (“CAT”). The CAT remitted the matter back to Ofcom for reconsideration. Following the CAT’s decision, we began a new review of the MNP process.
1.8 During our review, we have met with and listened to service providers (fixed and mobile), consumers’ representatives and other stakeholders. We have conducted quantitative and qualitative research, as well as a mystery shopping exercise into consumers’ experiences of obtaining the PAC that they need to commence the porting process. We have also analysed complaints made by consumers to the Ofcom Advisory Team (“OAT”) relating to the MNP process.
1.9 To be most effective, porting should be as convenient, fast and easy as possible for consumers. Our research found that a majority of consumers are satisfied with the current process and that it works well for many people.
1.10 Nevertheless, the research also identified a number of ways in which the current process causes difficulties for a significant minority of consumers. This evidence suggests that there may be benefits to consumers, and potentially to competition, that could result from improvements to the current process, although we recognise that any action we may take must be proportional to the amount of harm it is addressing. In considering options for improvement to the process, we have also been mindful of the European Commission’s proposed new requirements for number portability.
1.11 We have found evidence that suggests consumers can face difficulties and delays in obtaining a PAC from their current provider. The extent of this problem varies considerably between providers and users and can delay porting significantly for some consumers.
1.12 Our research indicates that consumers would benefit from a faster porting process. The evidence also suggests that consumers would prefer a recipient-led process rather than the existing donor-led arrangements. Under a recipient-led process, the transfer of a mobile number is dealt with by the new provider and there is no need for the consumer to obtain and pass on a PAC.
1.13 This consultation sets out our initial estimates of the costs of improving the MNP process. We have compared four principal options. These cover alternative arrangements for speeding up the porting process within either a recipient- or donor-led regime.
1.14 We also set out the evidence we have obtained about the benefits of each option, including the extent to which consumers state they would value a faster process. Our research suggests that consumers have indicated a preference for a “recipient-led” process(-2-)). We also highlight some of the qualitative benefits that may arise from a move to recipient-led porting and how we intend to proceed to further evaluate the costs and benefits associated with the four options.
1.15 Against today’s two working day process, we have considered both two hour and one working day porting. Combined with the option to move to a recipient-led process, we have considered the following options and have evaluated them compared to a ‘do-nothing’ counterfactual.
1.16 If the porting process remains donor-led, then we think that the consistency and speed of providing PACs to consumers needs to improve significantly. While it is generally possible to provide a PAC immediately, providers do not have commercial incentives to do so. In some cases consumers only receive a PAC four days or more after their request(-3-). We propose that under any future donor-led process, Mobile Network Operators (“MNOs”) will be required to supply PACs immediately over the phone or by SMS within a maximum of two hours after receiving a PAC request.
1.17 Our provisional analysis suggests that, in general, all of the options set out above could be justified in a cost-benefit analysis. We intend to conduct further work to develop our view of the costs and benefits associated with each option and we invite stakeholders’ views and evidence on this. In this consultation, we also set out the way in which we intend to proceed with further work and stakeholder engagement over the coming months. We will refine the specification of each alternative and develop our understanding of the costs and benefits associated with each option. Taken together, this evidence will be used to inform our decision.
1.18 Following consultation, in the event that we decide that it is appropriate to intervene to address the consumer harm identified, the likely route will be through a modification to GC18.
1.19 Of particular relevance to this review, as highlighted above, is the European Commission’s (“the Commission”) proposals for one working day porting across the EU. The current MNP arrangements may not be aligned with the Commission’s proposed requirements for number portability, which, if passed, are likely to require implementation by EU Member States during 2011. We have therefore taken into consideration whether the options we have proposed are likely to be consistent with the Commission’s proposals.
1.20 Some consumers find it difficult to get a PAC as quickly as they would like. In some cases it appears that mobile providers may be engaging in conduct that may constitute a contravention of General Condition 18.1 (“GC 18.1”), which sets out the rules for MNP, by not providing number portability as soon as reasonably practicable on reasonable terms. We have initiated a pre-enforcement programme to monitor MNO compliance with GC18.1 and to address the consumer harm that is currently being experienced(-4-). If compliance remains unacceptably poor, we will consider further action, including formal enforcement against providers and/or more prescriptive rules on the issuing of PACs.
1.21 This review is confined to the mobile porting process. Fixed porting processes are being considered separately by Ofcom’s project looking at migration, switching and mis-selling. Alongside this review of the MNP process, we are also reviewing the rules governing the routing of calls to ported numbers. New proposals on routing of calls to ported mobile numbers have been published separately today and can be found at www.ofcom.org.uk/consult/condocs/gc18_routing/ . However, should this consultation on changes to the mobile porting process result in a requirement for two hour porting, then there may be links between the routing requirements and the process requirement (such as, for example, the need for a central database). We will consider the impact of any such linkages during our assessment of the consultation responses.
1.22 We invite responses to this consultation on or before 5pm on 26 October 2009.
1.23 We expect that we will consult on our proposed final decision about changes to the MNP regime in the first half of 2010. In order to progress to this decision, we expect that we will need to undertake additional market research, obtain further expert advice about the technical requirements of change and engage closely with industry to refine the estimates underpinning our preliminary cost-benefit analysis and other qualitative factors that will inform our decision.