Uganda regulator postpones number portability

22.05.2009
The Uganda Communications Commission (UCC) does not yet see mobile number portability as a requirement in the country's mobile telephone market.

The industry regulator arrived at that conclusion after a feasibility study it commissioned last year.

Mobile number portability (MNP) is a regulated facility that enables subscribers of publicly available telephone services (including mobile services) to change their service provider while keeping their telephone number.

"At this stage, number portability is not something we see as a remedy in this market," Patrick Masambu, the executive director of the UCC, said. "We carried out a study into this and we have the conclusion that there is a certain subscriber sum we need before we introduce number portability because of the costs involved."

Masambu said that MNP, according to the study, will only make sense when there are 10 million mobile subscribers in the country.

"At the time we did the study, Uganda had 3 million users but as you can see, within another one year we will have the required number of subscribers to implement MNP," Masambu said.

Over the last two years, Uganda has seen mobile telephone users jump from 3 million to close to 9 million.

The introduction of affordable handsets as well as the opening up of the sector to full competition two years ago helped this growth.

According to Masambu, MNP might be provided by a third-party operator, rather than the five telcos that operate in the market today.

Incumbent players -- especially MTN Uganda, Zain Uganda and Uganda Telecom -- do not mind whether MNP gets introduced at a later date, since they have big subscriber numbers. But new entrants Warid Telecom and Orange Uganda see things differently.

An Orange Uganda official argued that MNP is important now because it gives customers the right to change supplier.

"The pattern we see is people carrying more than one phone; in some instances three, so they can try out the service of other suppliers. We believe number portability is important today and should be a requirement," said the official, who preferred not to be named.

In Uganda today, users either hold multiple handsets or SIM cards as a way of taking advantage of offerings by the five different telephone providers.

Other proponents of MNP argue it is difficult in a commercial sense for a new operator to enter the market. They say that even if a new player comes on to the market with the best network and service, it is very hard to get clients simply because they are already locked in with the existing players.

Vendor lock-ins tie a customer to a particular vendor for certain products and services.

The very competitive telecom market in Uganda operates on the strength of numbers, with each player touting the numbers of subscribers they have on their network as a competition tool to win new subscribers.

Those who are opposed to the introduction of MNP cite cases where it has not been successfully implemented. However, its introduction along, with the entry of more players in the market, could exert downward pressure on voice charges. Last year, the market experienced an average 10 percent drop in on-net call rates as telcos fought each other on the issue of price.