Wired-to-wireless will shake up U.S. telecom market.

AS WIRELESS TO WIRELESS local number portability (LNP) becomes reality in late 2003, wired-to-wireless LNP isn't far behind.

The FCC has set a November 24, 2003, deadline for wireless-to-wireless portability: Mobile phone carriers have to offer number portability for customers switching from one mobile service to another.

By mid-2004, the Federal Communications Commission (FCC) is expected to approve a wired-to wireless local number portability (LNP) mandate that will impact the U,S, telecommunications market heavily, Gartner analysts say. The new regulation would let customers take their wired phone numbers with them when they switch to wireless carriers, a capability Gartner describes as the last portability barrier for wireless carriers to overcome.

"The impact of such a mandate will be more dramatic than wireless number portability," says Ron Cowles, research vice president for Gartner. "It will turn marketing strategies upside down and have a significant impact on customer calling patterns and areas, state and federal regulations, pricing and interconnection agreements, and product offerings and plans. It will also likely raise questions about market coverage, reach, telecom quality, and security."

Gartner estimates about 10 percent of wired consumers will switch their service to wireless when they know they can keep their current wired phone numbers. That 10 percent is in addition to customers who have already migrated to wireless and those who are likely to do so despite the number portability limitation.

An FCC mandate would increase consumer demands on service providers, who would have to start offering both wired and wireless services, as well as a smooth transition between the two, to stay competitive, according to Alex Winogradoff, research vice president for Gartner. Wireless carriers would most likely partner with wired affiliates or expand their own businesses, Carriers that already own wired and wireless operations will be in a better position.

Consumers will benefit more from number portability than business users, at least in the short term, Garter predicts. "Wired-to-wireless LNP will predominately affect the mass market, but it's unlikely, in the near term, that it will impact the business market to any significant degree until wireless coverage and quality of-service issues are resolved," Winogradoff says.

According to Cowles, small business and home office markets will start to feel the impact as remote workers and small businesses use mobile phones for inbound calls more often.