The economics of mobile number portability

A tweet today got me thinking a little about mobile number portability (MNP) … The conventional wisdom is that MNP increases competition in mobile markets as it allows customers to switch more easily between networks. However there is also a limited supply of ‘good’ numbers on any given network (123-4567, 888-8888, etc). A new network with its own number prefix is able to replenish the supply of ‘good’ numbers and some customers who have a ‘bad’ number on their old network will be willing to switch even if they have to change their number.

So MNP is not necessary for the new network to compete for all customers, and in fact the new network is at an advantage in terms of attracting customers with ‘bad’ existing numbers. (Whether or not customers with ‘bad’ numbers are valuable customers is another question, however.)

On top of this, unless there’s some system for alerting customers about which network the people they are calling belong to, MNP possibly introduces some confusion about the cost of making a call, if there are different prices for calling on the same network versus calling other networks. This could have effects on customer behaviour and competition between networks that are more subtle … without a formal economic model it’s hard to be sure.

Anyway, I don’t have any strong conclusions here, just that there are some aspects MNP that might not be immediately obvious. And it’s interesting how a simple tweet can get you thinking about all sorts of things.