Number portability (NP) is fast catching on in Latin America, with several countries having already implemented or planning to implement this service. NP is scheduled to take off in 2008 in Mexico, 2009 in Brazil and the Dominican Republic, and 2010 in Peru, followed by Chile, Colombia, and Panama, which are currently studying its regulatory measures and implementation.
New analysis from Frost & Sullivan, Number Portability in Latin America, finds that this new set of regulations is bound to change the competitive landscape in the region.
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"With every country planning to implement NP, the question is which operator will take the lead in terms of marketing strategy," note Ignacio Perrone, Team Leader for the Telecom Services group at Frost & Sullivan. "Both current market participants and new entrants need to be well-equipped with strategies to capitalize on the opportunities NP market will open up to them."
As consumers in the major markets in the region will be able to retain their numbers when switching providers, it implies an additional competitive pressure. The first 18 months are expected to be the most critical, as enthusiastic clients are likely to switch providers the most during this period.
Existing market participants will try to gain a strong foothold in the market by offering value-added products and higher quality of service to customers. However, the aggressive strategies of new entrants pose major threat to market leaders. In an effort to penetrate the market, they lure away market leaders' clientele by offering lower-priced products.
"Therefore, both established vendors, as well as entrants should implement defense and attack strategies such as branding, attractive product offerings and pricing plans, along with good network quality and coverage," cites Perrone. "Those playing defense will need to fine-tune their customer relationship management (CRM) and front-end and target initiatives at clients that are more open to change."
Although NP makes clients more sensitive to quality, service, and price issues, it does not generate churn in itself. The main purpose of introducing NP is to foster competition and prevent market stagnation.
To sustain these efforts to keep the market alive, market participants need to devise a strong business strategy, with a focus on marketing.
"The complexity associated with NP implementation coupled with the need for high investments to set up networks systems and processes forces operators to focus mainly on sorting technical and financial issues," says Perrone. "Hence, participants need to start thinking in terms of marketing strategy in order to face the potential impact of NP and to stand out from the rest in the market."
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