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At this summit, you’re going to see a lot of presentations about differentaspects of MNP. I want to take a simple approach and show you approachesthat actually work for the consumer; alert you to some of the oppositionand other problems you will encounter; and demonstrate how wenavigated all that to produce an outstanding result in Ghana. We will alsodiscuss effective ways for the regulator to monitor and analyze portingperformance

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Interconnect pricing doesn’t always require a consultant with hugetemplates for the operators to fill (which they will manipulate in any case).You can learn a lot about appropriate mobile termination by looking at thelarge operators’ after-tax yield per minute for on network calls, includingairtime and top-up bonuses. Cut that number in half, and you see how theyvalue their own mobile termination. And if inter-network calls don’t gothrough reliably, that needs to be fixed.

When you have large disparities in market share, the regulator needs to beable to make these designations in order to ensure a level playing field.Doing the same thing for operators in very different situations is not propercompetition regulation.

Network QoS still needs to be monitored and standards enforced. It’s atechnical matter that the public cannot judge accurately in order to makeporting decisions.

Tariffs have to be clarified by advertising, not obscured as they often are bya multitude of bonuses, promotions, and plans. MNP can help only whencustomers can make informed decisions.

If mobile money or banking is important in your market, it needs to be justas interoperable as voice calls and SMS are. These rules need to be in placeBEFORE an anti-competitive situation arises.

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It’s not just that MNP will not solve these problems in the market – if theyare not solved by the regulator in advance, then MNP will clearly failbecause people will not want to switch, with or without their numbers.

As for the operators – there will be a number of presentations at thissummit that deal with operators’ MNP issues – but suffice it to say that ifyou have a viable growth strategy, MNP is your friend; if you don’t, it will notsave you.

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There have been many different methods to implement number portability– but many of them were introduced in MNP’s early days – but even thoughsome of these systems survive, they are clearly outdated and do notdeserve consideration today and I won’t waste your time discussing them.

Neutral party is necessary – one whose only motivation is to get portscompleted quickly.

Everyone gets to learn when a port is completed, and they add that newinformation to their local database. Before originating a call or sending anSMS, they look in their local database or FNR to see if the number is ported– if so, they route accordingly. If not, they route as they normally would.

Interconnect is not affected. Call setup times are not significantly affected.

The regulator also sees the same data – so if a problem is noted, everyoneis looking at the same information. Less to dispute.

Traffic doesn’t pass through the MNP system, so no need for carrier-gradebackup and connections.

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It’s important that everyone have a clear and non-conflicted role.

Aside from the legal implications, would an MNP service provider ever beable to “bite the hand that feeds it”?

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Policy is where you make the difference between MNP success and failure.Copy what works; avoid what doesn’t work. Now if you’re the kind ofperson who wants to copy Europe – then you’re a traditional sort – whomight want to use a hot air balloon to get to work – or has a dinosaur for ahousehold pet. Europe has nothing you will want to duplicate. They are stillstruggling to make porting happen in hours rather than days.

Here is how we do it in Ghana:

• Customers visit the network they wish to join, and need not contacttheir current network for any reason. No asking for permission to leave,unique porting codes, opportunities for donor to retain, delay, obstruct

• Ports can only be rejected by the donor network for a few reasons, suchas the account being inactive or already cut off, or less than 30 days old.Note that debt is NOT permitted as a reason for rejection. Prepaid andpostpaid accounts are not treated differently.

• We knew that the cost per port had to be kept low compared to marketARPU, so that recipients could reasonably subsidize it for all types ofcustomers. By the end of the first year, per-port costs had droppedfrom US$2.50 to US 80 cents.

• The donor can’t try to talk you out of porting. But you can port again toany network after 30 days. If porting fee subsidy is low compared toARPU, then the payback time is similarly short.

• Mobile banking funds must be retrievable at no charge after porting.

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A snapshot of Ghana:

Our population and mobile subscriber base are both just under 25million. So while telepenetration is around 100%, remember that a lotof people carry multiple SIMs.is estimated at 24.8 million, and amongour six mobile networks there are 22.5 million accounts, determinedby the ITU standard of activity in the previous 90 days.

Almost all accounts are prepaid.

We started licensing independent mobile networks in 1992, one of thefirst countries in Africa to liberalise the sector.

All networks are directly interconnected with termination rates set byNCA on a cost basis we review periodically..

As in most markets, usage is rising while average voice revenue peruser is dropping. In Ghana, voice ARPU is around 4 to 5 US dollars.

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Here are the active players in Ghana:

Tigo, formerly Mobitel, launched in 1992 and operates GSM and UMTSnetworks.

Expresso, formerly Celltel and Kasapa, launched in 1995 and now operatesa CDMA and EVDO network.

MTN, formerly Spacefon and Areeba, launched in 1996 and operates GSMand UMTS.

Vodafone, formerly the One Touch mobile operation of Ghana Telecom,launched in 2000 and operates GSM and UMTS.

Airtel, formerly Zain, launched in 2007 and has GSM and UMTS networks.

Glo launched at the end of April this year with GSM and UMTS.

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Arguably Ghana could have moved forward earlier with MNP as many hadurged, but the obstacles were only cleared in February 2010 – so we gotmoving.

The policy document was key to locking in the rules that ensure MNP wouldbe efficient and consumer-friendly. There was consultation, but in the end,NCA set forth the policy based on its consumer-oriented approach.

The Steering Group is the main governing body for MNP and is the keyvehicle for regulator-industry collaboration and it still meets today, thoughless frequently. Subgroups dealt with project planning, rules and contracts,IT-related matters, and switching related matters, and their number andtasks evolved as needed after launch

Although the vendor decision was collaborative and eventually unanimous,it is NCA which issues the service authorization.

The operators all launched MNP Help Desks which deal peer-to-peer withtheir counterparts on any MNP complaint or issue. They also serve asinternal MNP resource for the operators’ other departments. Operators’help desks are also supposed to manually monitor the central system tocatch any requests which their automated systems might have missed. PXSand NCA also have MNP help desks for dealing with their counterparts atthe operators and with complaints or questions.

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It is important to remember that what the operators must do is a lot morecomplicated than what the central service provider must do, and they haveless local experience doing it. The NP service provider and the operatorshave to finalize the specifications, including all message formats, before theoperators can finalize the specs for their software system vendors. Thecentral system has to be running when the operators are ready to begintesting their systems. Leave adequate time for these issues – and for testing– and the regulator needs to monitor the testing rather than acceptingreports at face value!

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The actual porting process is quite straightforward, as shown here:

(read the bullet points)

Again, while the recipient network is responsible to keep the customerinformed as to the outcome of his request whether successful or not, thesystem is set up to send several notification SMS to help in this regard.

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We now have over half a million successful ports, about 2% of the totalsubscriber base.

Cumulative impact on each network ranges from positive 3.2% to negative1.5%.

We are running between 25 and 40 thousand new ports per month.

Lately, 80% of porting requests succeed. Those that fail usually do sobecause the porting request and the validation SMS did not match upwithin 2 days.

10.6% of porting requests represent customers who have ported back morethan once, almost all of which went back to their original network. Thiswould seem to indicate that most ported customers were satisfied with theprocess and the choice they made.

Now more detail on this info.

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It’s very important to ensure that your MNP service provider produces datain an agreed format, automatically updated, and available as appropriate tothe regulator and the operators. These charts were all generated quicklyand easily by pasting such data into the Excel templates we had alreadywritten.

Porting volume followed the predicted trend, early high volume frompeople who had been anticipating porting. Then a decline, followed bygradual growth with market size and awareness.

Changes also occur based on operator promotions.

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And here you can see the cumulative growth. Note that the level of blockedports has remained low, consisting mostly of people who tried to portbefore they had been with their present network at least 30 days – or byerrors in donor systems

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October success rate 80.2% - Aborted 14.3% - blocked 5.5%.

Here you can see the variation in success, aborted, and blocked ratesnormalized to 100%. The times in which the abort rate was higher wasgenerally due to misinformed agents on the street not ensuring that thevalidation SMS was done, or a recipient network whose ambitionsoutstripped its resources. Many of those aborted requests weresubsequently resubmitted and succeeded.

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The impact of MNP on each network depends greatly on their efforts to useMNP as a tool. But remember also that a customer can only port from thenetwork they are presently on, so a net loss of customers may just be dueto high market share, not to any marketing or network deficiency.

Also keep in mind that central porting statistics can only tell us how manynumbers have moved. It cannot tell us whether those customers are aboveaverage users, and a case could be made that people who care enoughabout their number to move it may have higher than average ARPU.

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You can see from this analysis that porting is VERY fast in Ghana – thanks toa “Performance Goal” program that asks each operator to send a certainpercentage of its responses within a certain period of time.

We derive this data from files updated daily by Porting Access, available fordownload at any time. We then paste the data into an Excel template, andthe entire process is done in 2 or 3 minutes.

The average porting time for the entire market during this recent 11 dayperiod was 1 hour, 16 minutes. But you can see that 10% of ports wereextraordinarily delayed – due to interruptions and slow recovery at one ormore operators for part of the period. An additional 9% were delayed anadditional 5 minutes, and we can show you the cause in the next slides.

Even with these issues, 47% of ports were completed within 5 minutes, and74% within 10 minutes. The vast majority of customers have the portingdone and working while they are still with the agent or in the shop.

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You can see that slow responses by three networks about 15% of the timehad a dramatic impact on results. Generally the AUTH is received within 3to 7 minutes – unless the operator has had a service disruption, or theirautomated processing system simply misses a request and nobody therenotices it for many hours or until the next day,.

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Four of the networks were very fast when it comes to moving ahead on anauthorised request for customer porting TO them. The other two networkshad “issues”, presumably not intentional, as the customers would be joiningthem.

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And here is cause of the 9% of requests that experienced an additional 5minutes of delay or so – one network did not send 24% of its instructionresponses, so PXS did so on their behalf at 15+ minutes.

Locking in the performance goals as an MNP Quality of Service standard isthe next step.

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Certainly we anticipate continued growth, but the rate will depends on a lotof unpredictable factors. This chart takes into account only the previousfour weeks of data in making its predictions.

Remember though that MNP is a permanent part of the telecom landscape,and as long as we maintain and improve the factors important toconsumers, the absolute number of ports completed is perhaps lessrelevant than the changes in operator behavior it stimulates.

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“Enthusiasm” for MNP will vary from one operator to another. So will focusand experience. But when operators fear MNP, even if that fear isunjustified – they will raise all manner of objections at different stages ofthe process:

The “debt” objection comes up in almost every market. In Ghana, operatorseven started to allow negative balances for prepaid customers and claimthat is “debt”. But over a year later, we haven’t seen ONE case of MNPbeing used to avoid paying debt. The telecom chamber in Ghana adopted adebt notification system between their members that they havent evenbothered to launch. It is not a problem.

Operators would want to have a longer retention period than the 30 dayswe allow, but we don’t see the case for it. Almost nobody ports theirnumber frivolously. If an operator has a good network and prices, portedcustomers will not abandon them quickly. And the 10% or so who ported asecond time remained on their first choice over 100 days on the average.

In most countries where prepaid service dominates, it does so due to alarge informal economy, and structural deficiencies in banking, creditchecking, debt recovery, and even postal delivery of bills. But these peopleare just as connected to and dependant on their numbers as are postpaidcustomers in the more developed countries.

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We had an operator that insisted a porting request should be rejected if allthe details don’t match those in their records. This is nonsense; people mayuse a different form of ID when porting than they did when registering attheir current network; agents may not spell names very well or enter detailscarefully. You have to ask yourself whether it is wise to inconvenience 1000people to prevent one correctible case of mistaken identity or fraud.

The litmus test we apply on these matters is to compare the process ofleaving one network to join another WITHOUT porting, to that we adoptWITH porting. The numbers are not owned by the donor network – they area national resource, like spectrum.

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There will be all manner of surprises in the operational phase, which isanother reason regulators need to monitor and keep engaged – and issuedirectives as needed.

We did not expect that recipient networks would fail to follow through withporting requests and SIM activation for customers trying to port to them,but it’s happened quite a bit. Surely it’s not intentional.

Most porting is done by freelance agents connected to networks throughSIM toolkit-provided phones. Some of them have been too “creative” intheir sales pitches to prospective customers, failing to ensure that thecustomer understands they are leaving their old network, or not eventelling them they are porting. It isn’t an epidemic compared to the totalvolume, and we continue to employ education , persuasion, and eventuallysanctions to bring it under control. Still, it is not an epidemic. Emergencyrestore of a number back to its original network happens in about onetenth of one percent of the cases.

Some networks fail to correctly route traffic to some numbers. Sometimesthis is due to missing a broadcast message, other times it is due to someother internal software problem there. We require weekly reconciliation oftheir local database with the central database, but this does not eliminatethe problem.

There have been disruptions in the MNP service at each operator, eitherdue to an internal system problem or a break in the connection with PXS.

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Most have been short-lived. Some Help Desks have been very good atnotifying all parties at the beginning and end of each disruption, as required.Others, less so. We haven’t experienced any significant disruptions in thecentral service, nor have we had to transfer operation to the disasterrecovery site.

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There isn’t a simple single answer to MNP success. But we found that• You need to set the consumer friendly framework in your policy, but

you don’t need the policy to specify every detail.• The regulator is not operating the system, but neither can it sit at a

distance if it is to succeed.• As a regulator, you need to understand how MNP works as well as

understanding operations at mobile networks. You will have amentoring role, not just regulating.

• With a central system, there is a wealth of data available. Becomeexpert at analyzing it, and use it to support the points you need tomake.

• Certainly you want to create a collaborative atmosphere and you wantto have buy-in from all stakeholders. But it’s not a collaboration amongequals – you’re the regulator, and you hold the mandate for theconsumer. Over time, you’ll be less of a mentor and more of anenforcer.

AND – the regulator must remember that MNP is not a substitute for theother things that must be done, such as ensuring Quality of Service,functioning interconnect, and a fair competitive playing field.

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In closing – set your goals high and don’t accept excuses. You can do this.

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