Majority of developing world mobile markets have no plans for MNP - Asian and African regulators lukewarm on mobile number portability

Only a quarter of developing markets¹ have introduced Mobile Number Portability (MNP) to date, according to our research, while only a further 15% are known to be implementing MNP in the future. This suggests that about 60% of regulators in the developing world have either decided against introducing MNP, or have made no progress to date.

Mobile number portability allows subscribers to switch operators while retaining (‘porting’) their existing number. Regulators implementing MNP usually do so with the aim of reducing the ‘barriers to switching’ for consumers, which in turn can stimulate market competition and in some cases serve to reduce the power of a dominant player.

Many of the largest developing markets have already implemented MNP, including in India, Brazil, Nigeria, Turkey, Mexico and South Africa. China – the world’s largest mobile market - plans to do so in 2014. However, there is an apparent lack of enthusiasm for MNP in many markets across Asia and Africa. Regulators in markets such as the Maldives and Uganda decided against MNP after consultations concluded that implementation would be too costly. In addition, MNP is not applicable in the 8% of developing markets that support only one operator.

MNP status across developing economies
Source: GSMA Intelligence

¹ GSMA Intelligence classifies developing countries and economies as defined by the World Bank

The impact of MNP in developing markets is linked to two factors: the time taken to port numbers and the fee charged to the subscriber to use the facility. The porting time after submission of request varies from as long as two weeks in some countries to just a few minutes in others. In Ghana, for example, 92% of porting requests are completed within 5 minutes. Almost half a million numbers (447,095) were ported in the country during the year ending June 2013, up 21% year-on-year.

By contrast, in Kenya, it is cheaper to buy a new SIM than to port from one operator to another. The Kenyan regulator attributes low uptake of the service to “the lowering tariff differentials between operators and the convenience brought about by dual SIM card mobile handsets.” According to the regulator, the number of inward ports in Kenya fell to just 1,256 in the year ending March 2013, down 89% on the previous year.

On a regional basis, MNP is most prevalent in Europe: only three developing markets in Europe have yet to introduce the service, and two of these (Russia and the Ukraine) plan to do so soon. This means that potentially 14 out of the 15 European developing countries will have introduced MNP by next year, with Kosovo the sole exception.

Seven developing countries in Asia have launched MNP to date. China has trialled MNP in Tianjin and Hainan ahead of next year’s full implementation, though take-up was weak: only 50,000 of a possible 15 million subscribers switched numbers.

A further seven countries have implemented MNP in Africa, including Nigeria, South Africa, Ghana and Kenya. But it is interesting to note that many large African countries with a high number of domestic operators (five or more) such as the Democratic Republic of Congo and Uganda have yet to do so.

Turkey is a useful case study when assessing the impact of MNP on operator market shares. Market-leader Turkcell has been consistently losing customers to rivals Avea and Vodafone since the implementation of MNP in November 2008. In its October 2013 Investor Presentation, Turkcell attributed this trend to the fact that its “competitors continued to push for lower prices” and offered “high incentives through bundled packages”, which in combination with the ease of switching operators via MNP led to the operator’s market share declining from 56% in Q4 2008 to 51% in Q3 2013.