Ahead of number portability, companies fight for market share

Analysts say companies need to work hard to retain customers.

cell phone 2 88 (photo credit: )
cell phone 2 88
(photo credit: )
Ahead of the looming December 1 deadline of the Communications Ministry's long-awaited number portability program, the country's fixed-line and cellular companies are in the midst of a fierce marketing campaign aimed at increasing their respective market shares in the country's ultra-competitive communications sector. "All of the companies are offering benefits that have not been given before," said Tsahi Avraham, a communications and technology analyst at Clal Finance Batucha. "We are going to see a lot of advertising in the media as the start date gets closer as all of the companies know that they need to work hard to retain their current customers and attract new ones." Number portability will allow cell phone subscribers to take their numbers with them between phone companies within three hours of making the request. The Communications Ministry suspects that the lack of portability is one of the main barriers preventing consumers from switching providers. The portability plan was meant to start in September 2006, however no communication companies met the deadline. Led by Bezeq, a group of companies petitioned the High Court of Justice to overturn a government decision obligating that start date, which prompted the Communications Ministry to open a dialogue with all the country's phone companies - cellular, landline, and cable - to find a realistic date for implementation of the portability plan while still insisting that it must start in 2007. They settled on September 2007, but the ministry was forced once again to delay the program's start after Bezeq said over the summer that it would not be able to meet the ministry's preferred dates of September or October. If the companies do not meet the December deadline, they will be fined NIS 300,000 for every day they are late. "Everyone is getting ready technology wise, and I can tell you that everyone is saying that they are ready, but I am not sure if the system will be up and running," Avraham said. The country's three largest cellular providers, Cellcom, Pelephone and Partner, have all claimed that they will be ready to begin the program on December 1, and have been vying against one another to attract new customers. Both Cellcom and Partner have invested heavily in improving their customer service, with Partner, which operates under the Orange brand name, saying that it will open five new service centers and add 250 new service representatives. Partner will also offer incentives such as free minutes and free phones to customers who switch from other companies. The two companies have both said that number portability has increased marketing expenses. "What Partner is looking to accomplish with their aggressive program is to attract more customers and to gain a larger market share," Avraham said, adding that Pelephone, with its lower brand name recognition, seems to be more vulnerable. "They need to protect themselves," he said. Pelephone however, has not taken a defensive-minded approach to number portability. The company has offered customers a number of packages to customers, including their "Family Fun" and "Blue House" deals, through which subscribers have been offered discounts to numerous places of entertainment around the country in return for switching to Pelephone. The company is also preparing to launch its "Anything is Possible" offering in a NIS 12 million advertising blitz. Mirs, the country's smallest cellular provider, has also thrown itself into the race for more customers, recently announcing a plan that will give customers the ability to maintain two separate phone lines on the same handheld device. "We see number portability as an opportunity for us to grow our customer base and we expect that over 2008 our '2nd line' program will bring us 50,000 new customers," said Avrasha Burstein, CEO of Mirs. Meanwhile, in the cable market, HOT, which has run an aggressive campaign focused on its triple-play services, is expected to win customers away from Bezeq. "I think that HOT, which already has close to 40,000 new subscribers over the last quarter, will continue to take a portion of Bezeq's customers," Bozhena Gandelman, a telecom analyst at Psagot Ofek, told The Jerusalem Post last month. In an effort to promote the number portability program, the Communications Ministry will introduce a promotional campaign at the end of the month, including advertisements in print, on radio and on television. Additionally, the Ministry's Web site will feature information regarding the details of the program. "Our objective in launching the campaign is to ensure that all of the country's citizens are aware of what is happening and know that they can now switch easily between providers," a ministry spokesman told the Post. "Number portability will create a revolution in the communications market and we want everyone to know about it."