Telecom companies in Ghana are getting mixed feelings of apprehension and enthusiasm, as the test run of the proposed mobile number portability (MNP) system began last month. This latest development in Ghana’s telecom market could bring new threats and opportunities.

July, the month set for the commencement of the full roll out of MNP in Ghana, may come too soon for some mobile phone operators. If the tests run works out successfully, the new system will become fully operational to empower subscribers to choose their mobile service providers without changing their original phone numbers. The proposal for the roll out of the MNP system follows incessant complaints from subscribers who feel short changed by the telecom companies who, over the years, seemed not to have done much to improve the quality of their service delivery. Number portability refers to the possibility for the owner of a telephone number to change his mobile phone service supplier without changing his or her phone number; that is they are allowed to “port” their number seamlessly from one operator to another. Number portability generally has the effect of giving consumers more choice as to which mobile company’s service they wish to use at any time, and imposes additional competition for customers on the operators.

Ghana’s Minister of Communications, Haruna Iddrisu has publicly declared government’s commitment to start the implementation of the new mobile system in spite of the obvious threat it might pose to the survival of some operators. “This (MNP system) will guarantee quality service and give consumers a choice,” he said, adding that: “the system will serve as punishment for non-performing operators who may not be delivering on their minimum quality of service standard.”

It is expected that the new system would bolster competition in the mobile telephony market and enhance innovative and value added services. It is also expected to level the playing field for all operators in the market. Already, the National Communication Authority (NCA), the regulator, is assessing the effectiveness of the trial phase which began late February to guarantee seamless customer experience when the system becomes fully operational in July.  The test run has resonated positively among Ghanaian mobile phone users, who have often cited the fear of losing their mobile contacts with business associates, family and friends as the only reason they have remained loyal to their network provider even in the face of poor quality service.

At the heart of the implementation process for phone number portability, is Dutch firm, Porting Access BV otherwise known as PortingXS and its Ghanaian counterpart CIS Ghana Limited. This Dutch firm came up on top among nine bidders to provide the central equipment and services needed to implement the MNP in Ghana. PortingXS is not new in Africa. The Dutch firm has been awarded a similar contract by the Kenyan Telecom regulator, CCK, to supply, install, and commission and manage the East African country’s MNP system. Under the new system, subscribers who wish to switch service providers will go to the shop of the service provider to which they wish to move, where all the details of the change will be executed through a central system.

The customer will not have to go to his original network provider to seek permission to leave. After a successful switch, the subscriber will be able to use the new network and at the same time, receive calls and messages on his original number. And when he makes calls or sends messages, his original number will be shown to the person with whom he is communicating.

To prevent subscribers from abusing the system by frequently moving from one network to the other, which has the tendency to cause disruption in the system, it has been decided that subscribers will have to stay with a network for at least  one month before they can be allowed to move to another network.

However, moving across networks does come at a price. GB&F has learnt that PortingXS will charge about US$2.50 or less to port each number, which must be paid by either the customer or his new network. The cost of porting is driven by a formula involving price ceilings and volume of calls, but it starts at $2.50 and goes  down from there. Actually, the cost of porting is less than the average revenue per user per month, which makes it a less risky proposition for the recipient network to cover.

Former Managing Director of Kasapa Telecom (now Expresso), Robert Palitz, who has long been an ardent advocate of the MNP system, is happy the system he fought for in order to bring competition in the mobile sector and offer choice to subscribers has finally seen the light of day. In his view, the mobile telecommunications market in Ghana is sufficiently mature to accommodate this service feature.

However, the Nigeria Daily Independent (online) reported that MNP set for May 2011 was postponed in Nigeria until after SIM cards could be registered.

And there, telecom operators actually clamoured for more time to increase the robustness of their networks prior to rolling out the program. Using the fact that South Africa waited 12 years to introduce MNP after the launch of GSM in 1994, the Nigerian operators were more cautious in considering MNP.

The MNP roll-out in India however on January 20 was met with a demand of a million subscribers wanting to switch providers despite reports of technical glitches. The big winners in India were Idea Cellular (new entrant with little to lose) and Vodafone (gross marketing machine). Gains were reportedly made by those companies who aggressively pursued MNP education campaigns and advertising, but it was noted that there was a strong preference for incumbent GSM players, over those that offered CDMA.

Mr. Palitz who is now a consultant to the MNP project is of the view that the operators, with NCA, did a good job with the bid evaluation and PortingXS was the unanimous choice based on price (including the price per port) and capabilities as well as credibility.

“The cost of porting is a commercial decision for the receiving network to make as to whether it will pay on behalf of the subscriber or not,” he told GB&F in an exclusive interview.


Trends in Accesslines - 2010 updated December

Now the catch is that the receiving network will want to pay for a subscriber to cross-over to its network as an incentive to woo subscribers to the network. Currently, there are more than 17.4 million subscribers on mobile networks across the country, (although many own more than one SIM card) out of the estimated 24 million Ghanaian population and it is envisaged that the MNP may reduce the number of a duplicate chips if a person was keeping a phone number that most of his contacts knew but was mostly using another chip to make calls. Indeed, the cost of porting as quoted by PortingXS was a significant contributor in winning the bid to be part of Ghana’s MNP system. But not everyone is happy PortingXS won the bid.

Mr. Humphrey Quaye, who represented NP Systems in the bidding process, has accused the National Communication Authority (NCA) of presiding over a fraudulent and opaque process in the selection of PortingXS as the preferred bidder. He claims that PortingXS has little experience (it was only founded in 2001) and does not have the capacity to implement MNP in the country (only an estimated 15 full-time staff with an extreme propensity to use contractors).  According to him, the Dutch firm’s management of Ghana’s new mobile system is a recipe for disaster and will only leave mobile phone subscribers more frustrated than ever.  However, Mr. Palitz has dismissed the allegations, saying they are “absolutely without basis.” Mr. Palitz explained that NP Systems opted to charge a fee that was independent of the number of customers who actually use the porting service. Both MTN and Tigo have 20 million mobile numbers each; and the other four networks each have 10 million. When GB&F contacted the Director-General of the NCA, Paarock Van Percy, he said the Authority adopted the best of practices in the selection of the preferred bidder and dispersed rumours and allegations of any wrong doing on the part of the regulator.

“The invitation originally went to 15 companies, nine of them responded, evaluation was done by the evaluation panel made up of the operators and the NCA and five bidders were selected which was later reduced to four. The four made presentations to the evaluation panel and the winner was chosen by the telecom companies themselves because the thing is (MNP) will eventually be paid for by the operators and so they are also conscious of how much it will cost them.”

Trends in Accesslines - 2010 updated December

Mr. Robert Palitz Consultant to Ghana’s
Mobile Number Portability project

“The evaluation team was convinced that PortingXS has the ability to do it. PortingXS said they are going to start the trial in January ahead of the July implementation. If they did not know what they were doing, would they have started the trial in January?” he asked rhetorically.

“The fact is that Humphrey engaged in a process and obviously he is disappointed by the outcome and I think he’s just being emotional about it, that’s all. I wouldn’t preside over fraud. What do I get from doing something like that? In every bidding process somebody must win. Why is it that only Humphrey and his people are the only ones complaining? There are other people who did not win. Why have they not raised any objection? The NCA provided the platform for the evaluation process to take place.”

“That is all that we did. The winner was chosen by the operators themselves because they know which vendor is good for them” he said. Now PortingXS has been mandated to steer Ghana into the ever widening club of countries that have successfully implemented MNP to offer intense competition in the telecom market. Ghanaians and indeed the mobile industry have been waiting anxiously for the introduction of number portability services. Changing subscriber numbers can be a major inconvenience at both the individual and business levels.

This is because subscribers’ numbers have now come to be considered as part of their identity, and any change affects their dealings with friends, family, acquaintances and business associates. For businesses, the inconvenience of changing phone numbers also comes at a cost of printing new stationery and communicating the change to clients, which more often than not includes advertising. So as the NCA looks forward to the implementation of the new mobile system in Ghana, subscribers are equally eager to countdown to the day when they can choose their mobile service provider without having to rely on any institution to monitor and apply sanctions when telecom companies fall short of delivering quality service.