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Canada's cell phones just got a little more mobile

Taking effect this week for consumers in Canada is wireless number portability (WNP). Consumers throughout the majority of Canada will be able to keep the same telephone number when changing cell phone service providers—a freedom that U.S. wireless customers have enjoyed for years.

This follows a decision issued in 2005 by the Canadian Radio-television and Telecommunications Commission (CRTC) requiring Canadian cell phone service providers to implement WNP by March 14, 2007. Earlier in 2005, the Government of Canada had requested that the Commission move expeditiously to implement WNP.

“Although the 18-month implementation of WNP has been one of unparalleled complexity and co-operation within the Canadian telecommunications sector, the industry's significant investment and commitment to deliver this service to Canadians has resulted in the fastest deployment of its kind in the world,” said the Canadian Wireless Telecommunications Association's chief executive Peter Barnes. “The introduction of WNP brings yet another layer of competition to the industry that will only further drive the delivery of world-class wireless products and services that Canadians expect and deserve.”

Consumers who live in areas where local number portability is currently available will now be able to transfer their phone numbers between cell phone service providers, as well as between landline and cell phone service providers.

“I know there are other companies out there that I could get a better deal with,” said Clifford La Rose, who runs a mobile diesel-repair service in Toronto. “But the problem was, owing to the business that I'm in, a lot of customers have got my present number. Along with that, I had printed up a lot of business cards, so I didn't want to change.” Thanks to WNP, La Rose may soon be spending less on his cell phone bill.

Although consumers may freely take their numbers with them to new providers, their handsets may not be able to make the transition. Canada, like the U.S., operates with two different wireless systems—CDMA and GSM. Bell Mobility and Telus Mobility share the CDMA market (and cell towers), while Rogers Wireless rules the GSM market. Fido was the next largest GSM provider until it was acquired by Rogers in 2005. Both Rogers and Fido, along with several smaller brands, such as 7-11 Speakout Wireless, all operate using Rogers’ cell towers. Recent entrant Virgin Mobile competes in the wireless market's value segment, but has no cell towers of its own. Instead, Virgin Mobile partners with Bell Mobility for use of the CDMA network.

Consumers aiming to switch providers will likely find that they have to purchase new handsets that are compatible with the network. Furthermore, handsets that are sold by wireless providers are normally “locked” specifically for use on that network. Even if a consumer owns a network-compatible handset, the phone must first be “unlocked”—a process that can cost between $20 to $50 at aftermarket phone shops.

It is also important that consumers who wish to change providers before the end of their service contract verify the terms and conditions, as they may be subject to early termination fees. Depending on the service provider, customers could pay upwards of $720 in penalty for early cancellation.

Some industry onlookers expect an increase in competition and a decrease in the monthly service fees charged by providers, but Ken Wong of the Queen’s School of Business predicts that most consumers are going to stay put. “Except for the most disgruntled consumer, no one is going to migrate phone companies just because they suddenly can,” he explained to the Winnipeg Free Press. “The carriers are being very careful to point out to people that the migration path is not necessarily a smooth and easy one.”

The hardware and early termination fee barriers are temporary ones. Wireless providers often offer free or heavily discounted handsets as incentives to attract new customers and to entice existing customers to renew their contracts. Once a consumer is at the end of a contract, he or she does not have to face the monetary challenges of switching providers.

“We had a large volume of calls from customers wishing to port their numbers into our system on the first day of WNP,” said Mike, a customer service representative for Rogers Wireless. “Most of them just wanted to get away from the bad experiences from our competitors, or they just wanted to have phones that they couldn’t buy before.”

WNP allows the consumer to jump to whichever carrier is offering the best value, but if the U.S. market is to be of any indication, the frequency of customers switching to another provider may eventually decrease to levels below those before number portability. With the freedom to switch, consumers will find the carrier that best suits their needs, while service providers find better ways to serve their customers—making for a winning combination for mobile users in Canada.

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