A 10 percent increase in customer churn associated with the scheduled implementation of wireless local number portability could cost the wireless industry more than $20 billion over four years, according to a study by market strategy consultant iGillottResearch Inc.
Iain Gillott, founder and president of iGillottResearch, said the study includes a number of increased churn levels, including smaller 1-percent and 5-percent jumps, because “nobody truly knows what the effect of WNP will be in the U.S.”
“It’s a worse-case scenario, but could it happen? Yes it could happen,” Gillott said.
While most analysts agree that WNP will have some effect on customer churn, Gillott noted he did not think the impact would be felt for at least six months after WNP implementation, which is currently scheduled for Nov. 24.
“This is not going to happen on Nov. 25,” Gillott said. “People have contracts, and I expect the systems will not be prepared to handle high traffic volume from day one.
Gillott added that a worst-case scenario of more than $20 billion in additional costs to cover WNP could also trigger industry consolidation as most carriers would not be able to shoulder such a financial burden alone.
“If you add $20 billion to this industry, you have to have consolidation,” Gillott explained. “It would make life very different.”
