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Beware of LNP – There’s a Catch!

  • Alyx 

LNP stands for Local Number Portability. You will run into LNP if you want to change from one access provider network to another network but keep your existing telephone numbers.

The public network is a network of interconnected networks. To enable a calling party to be successfully connected to a called party, the public network switches need to be configured to route calls to the called party’s current access provider network.

If a customer changes access providers, and wants to retain the same telephone number, the public network switches need to be re-configured to commence routing calls to the customer’s new access provider. LNP refers to the process of changing access provider and re-configuring the network switches to ensure the customer continues to receive calls on the same telephone number.

So far so good, but what is the catch?

Broadly speaking, there are two types of industry solutions for number portability. One type is based on some form of call forwarding set up in the network switches. The other type is based on a central industry database where every call dips into the central database to find out which network the called party is on so the call can be correctly routed.

In Australia, fixed voice operates on a call forwarding type of LNP solution. Mobile number portability operates on a central industry database type of solution.

Call forwarding solutions are inferior to central industry database solutions because they tend to be very manual, slow, error prone and expensive for customers.

The typical charge to port one PSTN number is $7.27, and for an ISDN 100 number range the charge is $763.64. The actual charges depend on which service provider is involved, the quantity of numbers being ported, the complexity of the port and whether the port is undertaken during business hours or after hours. In the business market it is common for customers to have hundreds of PSTN numbers, and multiple 100 number ranges so the charges can be substantial.

The claimed intention of LNP charges is to recover the administrative cost of undertaking the porting process. The charges are substantial at least in part because of the cumbersome nature of the current industry solution.

A extra layer of confusion can arise when the customer’s current supply contract is with a reseller.

Let’s say the customer originally acquired services from carrier A. Then the customer changed supplier to a reseller B, who is a reseller of carrier A services, but also offers their own network services. Let’s say the customer’s services are initially transferred to reseller B via a billing churn. Then if the customer’s services are ported to reseller B’s network, carrier A will bill LNP charges on the wholesale bill sent to reseller B. Reseller B may then rebill the charges to the customer. The customer can be forgiven for being confused.

What are the take outs from all this?

It seems reasonable to impute an anti-competitive motivation because the high LNP charges to raise the customer’s cost of changing access network provider.

If the industry was truly competitive action would be taken to implement a better, more economical solution.

Customers need to be aware of LNP and the associated costs so they can effectively deal with it in negotiations with carriers and service providers. In short, the customer should require the gaining supplier to absorb the LNP costs.

For issues like LNP the services of a knowledgeable, independent TEM consultant can be invaluable. Would you like a no-obligation audit of your existing contracts and how you can reduce your overall telecommunication costs? Contact us today.