Last week’s brush with Isabel aside, wireless local number portability-combined with other man-made turbulence-is the perfect storm.
Never in the brief, spectacular history of the mobile-phone industry has there been a rule change with the potential to paradoxically cause so great disruption and rationalization in the competitively crowded cellular market.
In truth, battle among the six national mobile-phone operators-Verizon Wireless, Cingular Wireless, AT&T Wireless, Sprint PCS, T-Mobile USA and Nextel-has been constrained and artificial to date. Telephone numbers have value to consumers in the same way spectrum is prized by carriers. The inability to keep phone numbers chills consumer choice to some degree. The freedom to move from one wireless carrier to another without surrendering one’s phone number unshackles subscribers. That is when true competition occurs.
It’s what makes Denny run. The Verizon Wireless CEO, even at the risk of forever alienating himself from his brethren and throwing industry into unprecedented chaos, understands this. So do some competitors who want to derail the Nov. 24 LNP start-date.
For Strigl, it is a rare business opportunity any smart executive would exploit in a heartbeat. For other mobile-phone carriers, LNP is possibly a live-or-die proposition. Look for carriers to rush the season-the holiday season, that is-by starting to offer attractive promotions in super-hyped ads in order to cushion the blow. Moreover, service contracts still count for something. The great exodus won’t happen all at once.
LNP alone is a powerful change agent. But there are other forces at work-like information and transparency.
Consumer litigation and increased scrutiny of carrier business practices by state attorneys general, state public utility commissions and Congress are forcing wireless carriers to provide consumers with better data and greater flexibility.
Knowledge is power. A consumer armed with information, a 14-day trial period and a portable phone number is dangerous. Especially for carriers vulnerable to churn.
Strigl, confident about a business model captured in the firm’s dopey “Can you hear me now?” ad campaign, has made a shrewd calculation. It is based on a truism that had little or no capital during the halcyon days of the dot-com era but that became a revolutionary concept after the bubble burst. It is this: quality matters. Some might consider it the killer app and next big thing all rolled into one. That’s digerati talk.
