Verizon Wireless, the largest U.S. mobile-telephone operator, broke ranks with rival carriers yesterday by dropping its opposition to a rule requiring wireless companies to let customers keep their phone numbers when changing providers.
Verizon Wireless will absorb the cost of implementing the new rule, which is effective Nov. 24, Chief Executive Officer Dennis Strigl told a conference in New York.
The decision ends what had been a united industry front against number portability. Strigl leaned on other carriers to also stop fighting the rule, which some have argued would cost about $1 billion initially and $500 million a year after that. The industry has staged regulatory challenges against the guidelines, arguing that they will unnecessarily increase competition.
"This is one part resignation and one part opportunity," said Paul Glenchur, a telecommunications analyst at Schwab Capital Markets in Washington. "In a sense, the marketing war has begun, and other carriers may have little choice but to engage."
Verizon Wireless may gain customers from rivals under portability because it has a better wireless network, Glenchur said.
Allowing customers to keep their phone numbers when leaving or joining Verizon Wireless will cost 10 cents to 15 cents per customer each month, or $60 million a year, Strigl said. Verizon Wireless hasn't decided how to recoup the costs, he said.
"Let's as an industry stop moaning and groaning," Strigl said at the Yankee Group's Wireless Leadership Summit. "Our government has spoken. Our customers tell us they want it. Let's clear the decks and get it done."
The Cellular Telecommunications & Internet Association, a wireless industry group, filed a new request last week with the U.S. Federal Communications Commission to rescind the rule. The group has two other pending petitions at the agency. One asks the FCC to make it easier for consumers to move their home number to a wireless phone. The other seeks to resolve issues such as testing processes for transferring numbers.
"Key things need to be done or it's not going to be seamless and consumers are going to be very frustrated," said Kimberly Kuo, a spokeswoman for the cellular group.
Strigl's comments came 18 days after Verizon Wireless and the industry group lost a court bid to overturn the rule. The company will be neutral on any potential legislation in Congress to delay or stop number portability, spokesman Jeffrey Nelson said.
Closely held Verizon Wireless is a joint venture of Verizon Communications Inc., the biggest U.S. local phone company, and Vodafone Group PLC, the world's largest wireless carrier.