Competitive Intelligence

Verizon Wireless Winning, Sprint PCS & AT&T Wireless Getting Hit by Number Portability

Just a quick story today turned up a week after WNP went into effect, from Asbury Park Press, Verizon Wireless appears to be gaining from the new law, while AT&T Wireless and Sprint PCS seem to be losing:

To determine which U.S. wireless companies were winning the most customers this week, Wachovia Securities Inc. analyst Jennifer Fritzsche visited stores.

RBC Capital Markets analyst Jonathan Atkin contacted retail-chain owners and managers. Legg Mason Wood Walker Inc.'s Craig Mallitz surveyed colleagues. Bob Egan of market researcher Mobile Competency extracted figures from mobile-phone carriers.

They turned up similar results: Verizon Wireless, the biggest U.S. mobile-phone company, is winning customers in the wake of a rule that allows users to keep their phone numbers when switching providers. AT&T Wireless Services Inc. may be losing them.

"Verizon Wireless stores had the most traffic," Fritzsche wrote in a research note on Tuesday, after visiting 15 stores in Chicago on Monday. "AT&T Wireless and Sprint PCS seemed to be the carriers where people wanted to switch from."

Verizon Wireless and its competitors have declined to say how they've fared since the U.S. Federal Communication Commission number mandate took effect Monday, forcing analysts and investors to gather anecdotal evidence. Analysts had picked Bedminster-based Verizon Wireless as a likely winner before the rule began, saying its network is the most reliable.

RBC's Atkin, who's been in touch with owners and managers of retail chains encompassing about 400 stores, said AT&T Wireless and Cingular Wireless LLC have received a "disproportionately large number" of requests to switch.

Verizon Wireless -- a joint venture of Verizon Communications Inc. and Vodafone Group PLC -- and Nextel Communications Inc. have gained more subscribers than they've lost, he said.

Egan made the same observations, based on store visits and tallies from five of the six largest U.S. carriers: Verizon Wireless, Cingular, Sprint, Nextel, and T-Mobile USA.

Albert Lin, an analyst at American Technology Research Inc. in San Francisco, studied reports from telecommunications-software suppliers such as Amdocs Ltd. and Convergys Corp., which are monitoring activity in phone-number switches.

Verizon Wireless is gaining the most customers, followed by Reston, Va.-based Nextel and Overland Park, Kansas-based Sprint PCS, he said. Cingular Wireless, AT&T Wireless and Deutsche Telekom AG's T-Mobile unit are losing clients, Lin said.

"We believe that our message of the largest and most reliable network is resonating in the marketplace," Verizon Wireless spokesman Jeffrey Nelson said.

Nextel spokesman Christopher Doherty said it's hard to distinguish whether customers coming in to buy Nextel service would have done so without number portability.

"It's been busy, but it's also one of the busiest shopping times of the year for wireless," Doherty said.

"We'll let the results speak for themselves," T-Mobile spokesman Richard Brudvik-Lindner said. "Opinions right now are all over the map, and we're not going to get into playing the horse race game on this."

Well, I can tell you this: not as many people switched as were expected to, and most of the carriers had a decent strategy in place from an advertising perspective. I think most people are waiting to see what the first-movers experience is before swapping service. Frankly, I think it's silly to give anybody a cell phone number - my home phone service - VoIP provider Vonage - will forward unanswered calls automatically.

- Arik