Balancing Act (London)

29 August 2014

Africa: Ghana's Mobile Number Portability Scheme Outstrips South Africa, Kenya and Nigeria

London — Mobile Number Portability (MNP) schemes have been slow to take off in Sub-Saharan Africa and their performance has not been outstanding. Ghana is the exception and has good reason to be bragging about its success. Russell Southwood spoke to Bob Palitz, a telecom consultant who has been involved in the MNP process from its policy and planning stages through to implementation and launch.

Ghana's MNP scheme was launched on 7 July 2011 and this week the Ghanaian regulator NCA issued its 3-year report on how it has worked. The stats provided are fairly compelling:

* Over the three-year life of the scheme, 1,655,404 porting requests were successfully completed. The third year total of 838,202 represents an 87% increase over the second year.

* The total number of completed ports from launch until 30th June 2014 is approximately 6% of the total active mobile numbers in Ghana.

* The speed of processing porting requests has increased significantly. In June 2014, the average time to complete the porting process after request submission was 4 minutes, 16 seconds. 91% were completed in 5 minutes or less and 67% were completed in 2 minutes or less. In other words, as Palitz puts it:"You walk away, it's already working. It's like buying a Coke."

It's tempting to write the story as one of winners and losers and the process has had its heaviest impact on the largest of the incumbent mobile operators, MTN. It has lost 402,244 subscribers over the three years, a net loss of -3%. The big gainers have been Tigo with 249,725 subscribers (a 6.2% gain) and Vodafone with 228,183 subscribers (a 3.4% gain).

Palitz makes a number of qualifying points on these results:"People complained about the largest network operator before MNP but there's a reason why the largest network operator is the largest operator. You can introduce MNP but you can't influence how quality and price changes because there are 6 operators."

"All operators are getting customers porting in and porting out. In no case, is the movement only in one direction. So in one hypothetical scenario, you could be losing low ARPU customers and have high ARPU customers porting in". The data doesn't tell you about the profitability of customers using MNP.

But after 3 years 78% of customers who ported to another operator stayed with them. The 28% who didn't often ported to another carrier before returning to their original choice or became inactive:"The average churn rate in the market is 4.5% but is only 1% among MNP users. So the MNP users are better than average in terms of loyalty."

There are three other MNP schemes in Sub-Saharan Africa and they are all in its larger markets: South Africa, Kenya and Nigeria. There are a number of reasons why these schemes may not have worked as well as the Ghanaian one.

South Africa launched its scheme in 2006. It has taken 7 years to reach a 5% porting rate against Ghana's 6% in three years. It chose to go the route of having the MNP company as one owned by the operators: As Palitz notes:"If it's owned by the operators, you can't take a strong stand against misbehavior and you're prone to being unduly influenced by the large operators."

"The South African market is probably not competitive enough and you can see this from the complaints from Cell C against the two other operators and disputes around the interconnection issue. MNP can't be effective if there's not already a level playing field."

Kenya's CCK (now CAK) launched its MNP scheme 3 months before Ghana but has thus far only ported 1,388 customers, an almost statistically insignificant 0.0044% of the user base:"On a slow day, Ghana ports more in a day than Kenya ports in an entire year."

Palitz points to the existence of a dominant operator and past Presidential interference in the interconnection regime:"It's a clear case of the regulator losing the plot. The MNP scheme hadn't even had a week of testing and it didn't work. It was huge mess and it's still not fixed."

Nigeria's MNP scheme is more of a puzzle as very little useful data has emerged. Over its first year, there were 115,000 customers porting which contrasts with 363,000 customers porting in the first year of the MNP scheme in Ghana. However, given Nigeria's much larger user base, it is clear that its scheme is far from successful.

So what's gone wrong?:"It's hard to give a clear answer. One thing is that the porting takes 48 hours to complete. Maybe this slowness is an issue. Also you're not allowed to port again for 90 days whereas in Ghana it's only 30 days. This is just conjecture. I don't think anyone has a handle on the situation."

There is no doubt that the number of MNP schemes will grow in Sub-Saharan Africa but many are subject to that classic mobile operator regulatory delaying tactic, do an economic feasibility study. But as Pailtz says:"That's just dumb. It's a consumer right and you don't subject them to economic assessment. MNP has to be fast and cheap for the consumer and if they're no functional problems, you're going to be OK."

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