Switching cellphone providers? Take your number with you!
As the court-appointed date of November 24, 2003 approaches cellular companies are apprehensive (and putting their legal might behind fighting this decision) about what it'll mean for their business to allow customers to take their phone numbers with them according to this Wall Street Journal story (subscription required). For instance, I have a cellphone that ends in "-1000" and I would never have left Verizon because I love that number and most people I know have that number for me, and it would be difficult at best to get the new number to everyone.
He cites the experience of Hong Kong, where cellular-number portability was implemented in 1999. There, monthly churn rose from 2.5%-3.5% of customers to 9%-10% in the quarter it was put in place, and a massive price war ensued. Churn has settled back into its original range, but rises to 5% or 6% every year on the anniversary of portability when many customer contracts expire. Portability is also the rule in other countries, including Australia and the United Kingdom, though churn hasn't increased as much in the U.K. because it can take weeks for numbers to be transferred.
....Keeping down customer defections is vital: It generally takes nearly a year for a carrier to earn its money back from the cost of acquiring a customer. The average customer stays with a carrier for roughly three years, translating to two years of operating profit. But if monthly churn rises from its current level of 2.8% to, say, 6%, it means a carrier's profitable period could be reduced to as little as four months before the subscriber moves on and the carrier has to start the process all over.