Gartner Says Wireline-to-Wireless Local Number Portability Will Reshape U.S. Telecom Market
STAMFORD, CONN., August 27, 2003 — As wireless-to-wireless local number portability (LNP) soon becomes a reality, wireline-to-wireless LNP remains the last portability barrier for wireless carriers to overcome. By mid-2004, Gartner, Inc. (NYSE: IT and ITB) analysts expect the Federal Communications Commission (FCC) to approve a wireline-to-wireless LNP mandate that will have a major effect on the U.S. telecommunications market.
Gartner analysts said this action by the FCC would allow customers to take their phone numbers with them when they switch between wireline and wireless carriers.
"The impact of such a mandate will be more dramatic than wireless number portability," said Ron Cowles, research vice president for Gartner. "It will turn marketing strategies upside down and have a significant impact on customer calling patterns and areas, state and federal regulations, pricing and interconnection agreements, and product offerings and plans. It will also likely raise questions about market coverage, reach, telecom quality and security."
According to Gartner, nearly 10 percent of wireline consumers will transfer their service to wireless once they have the option to keep their current wireline phone numbers. That is in addition to customers that have already migrated from wireline to wireless and are likely to do so despite the number portability limitation.
"In the longer term only service providers with business models that offer consumers a full range of both wireline and wireless services, and easy transition between the two technologies, will succeed," said Alex Winogradoff, research vice president for Gartner. "Unaffiliated wireless operators will find it difficult to compete against affiliated operators and will likely go out of business unless they adopt a more comprehensive business model or partner with, acquire or be acquired by a wireline operator."
Carriers that already own wireline and wireless operations will be the least vulnerable to a restructuring of the market, but Gartner advises that they must develop truly integrated wireline and wireless solutions.
"Many technical, product and regulatory issues will have to be resolved before wireline-to-wireless number portability can be fully implemented," said Winogradoff. "Wireline-to-wireless LNP will predominately affect the mass market, but it is unlikely, in the near term, that it will impact the business market to any significant degree until wireless coverage and quality-of-service issues are resolved."
"The small business, small office and home office markets will be affected as remote workers and small businesses increasingly use mobile phones for inbound calls, especially where the quality of service is good," Cowles said.
Additional analysis is available in the Gartner Perspective, Wireline-Wireless Number Portability: A Market Change Agent. The report examines the impact that wireline-to-wireless number portability will have on carriers and users. This report can be purchased on Gartner's Web site.
More information on the telecommunications industry can be found on Gartner's Telecommunications Focus Area at www.gartner.com/pages/section.php.id.2030.s.8.jsp. This Focus Area provides access to various research reports that analyze market conditions and future trends on the telecom industry.
Gartner analysts will provide additional analysis on the telecommunications industry during Gartner Symposium/ITxpo 2003, which will be held October 19-24 in Orlando, Florida. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more details or to register for Gartner Symposium/ITxpo 2003,visit www.gartner.com/us/symposium/us or call 1-800-778-1997. Members of the media can register for the event by contacting Maria DiMasi at 212-699-2734 or e-mailing GartnerEvents@middleberg.com.
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