Mobile Number Portability With Brand Building Could be Winning Combination for CEE Telecoms Players, Says IDC

PRAGUE – APRIL 20, 2007 – According to the latest study from IDC, operators large and small can use number portability to their advantage while averting its potentially negative impact by employing comprehensive, long-term mobile number portability strategies centered on brand building.

Two years since its introduction in Central and Eastern Europe, mobile number portability has helped remove some barriers to competition, forcing operators to be more responsive to customers and to continue to focus on marketing and brand development. Nevertheless, it has initially failed to achieve the dramatic impact hoped for by some operators and feared by others.

Number portability, seen as an important step in the liberalization of telecommunications markets and required by an EU directive, allows mobile users to switch operators while avoiding the cost and inconvenience of changing telephone numbers. At the same time, administrative regulations foster competition among operators and prevent any operators from gaining market power by penalizing users for switching networks.

Corporate image will be essential to both encourage subscriber migration and retain existing customers. While the IDC study defines three main factors that influence user migration (user motivation, operator promotional activities, and barriers to porting, such as fees and lengthy procedures), IDC believes that subscriber attitudes towards their current operators will prove to be the primary driving force in the decision to change providers.

"Mobile number portability represents a notable opportunity for CEE operators to gain market share and change the traditional balance of power in national markets," said Kresimir Alic, senior analyst, IDC CEMA. "Operators aiming to succeed at this must realize that short-term campaigns are less likely to motivate users to change providers if the given company has not created an exceptional and appealing image."

According to the IDC study, the overall rate of ported numbers remains low in most CEE countries, hovering below 1% of all subscriptions. This reflects the very recent introduction of the policy in some cases and slow uptake from customers in others. The only exception is Estonia, where 4.2% of users have switched operators since the introduction of number portability in January 2005. Although user migration rates remain relatively low across the region, the number of users who switch service providers is expected to grow in the coming years as users get used to the concept and more of the obstacles are removed by official intervention.

IDC's An Early Assessment of the Impact of Mobile Number Portability on CEE Mobile Markets (Doc #EW14P, April 2007) provides an overview of the market development since the introduction of mobile number portability in eight countries in the CEE region, defines the driving forces behind user migration, and advises mobile operators on strategies to successfully deal with number portability depending on their market strength.

For more information about acquiring IDC research on telecommunications, please contact Tatiana Hinova at thinova@idc.com or +420 221 423 140, contact your local IDC office, or visit www.idc.com .

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com .

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