One year ago the moment that nearly every American was waiting for finally happened -- consumers could switch wireless service providers and keep their telephone numbers. It took the FCC years of dogging the nation's service providers to put the technology in place, and they fought the mandate the whole way.
When the wireless local number portability (WLNP) rules took effect in the top 100 markets last November, many predicted a flood of defections. It comes as no surprise that people are attached to their phone numbers, which factor into their identity. Certain numbers are hot commodities to some, with a Chinese man recently bidding $215,000 to buy a mobile number there.
Well, the onslaught of defectors didn't really happen. Actually, the FCC reported last week that nearly 8 million consumers chose to leave their wireless carrier and take their number over the past year. To give a little perspective, though, nearly five times that many left their provider the year before portability was in place. A portion of these 8 million would likely have left their providers with or without their numbers anyway, clouding the true impact of the ruling.
So what gives? Wasn't this newfound freedom designed to give subscribers the chance to flee lousy service subscribers, taking their phone numbers with them as they switched to a competitive service?
The answer is simple: The contract is still king. Before WLNP rules took effect, most wireless service providers made great efforts to entice those not tied to a contract to sign up for a one- or two-year plan. Many a carrot was dangled -- free minutes, free phones, free everything. As a result, many people are still stuck -- for a while.
So which providers have come out ahead so far? In a nutshell, it has gone as most predicted. Verizon Communications (NYSE:VZ), Nextel Communications (NASDAQ:NXTL), and T-Mobile (subsidiary of Deutsche Telekom AG (NYSE:DT)) have had a solid year of subscriber growth, while SprintPCS (NYSE:FON), Cingular (joint venture between SBC (NYSE:SBC) and Bellsouth (NYSE:BLS)), and AT&T Wireless have languished. AT&T Wireless had an absolute mess of a year, with their customer care and activation system experiencing major problems through the busiest time of the year. They've now merged under Cingular, and SprintPCS no longer has a tracking stock.
But while number portability didn't live up to most of the hype floated in the press, it has started a very positive trend in improving services for consumers. It has also helped investors zero in on which companies are providing better services to their customers.
David Gardner has selected SBC Communications as one of his Motley Fool Stock Advisor recommendations. Check out the newsletter for six months without risk to find out what potential he sees in SBC.
Fool contributor Dave Mock cherishes his mobile number, but would give it up in a heartbeat for a six-figure bid. He does not own shares of any company mentioned in this article.
