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Sonera Takes a Portable Hit

With the introduction of wireless number portability just weeks away, the U.S. mobile operators may want to look across the Atlantic to see the impact that the same scheme has had on Finland's leading mobile operator, TeliaSonera AB (Nasdaq: TLSN) (see Number Portability Smacks TeliaSonera).

Mobile number portability was introduced to the Finnish market on July 25, nearly a month into TeliaSonera's third quarter (July-September). The impact was that the dominant player, which had slightly more than 50 percent of the market at the end of the second quarter, suffered a net loss of 30,000 customers during the past three months, while the churn rate more than doubled from 10.2 percent in the second quarter to 21.8 percent. This means that, while TeliaSonera lost a load of subscribers, it also added new customers, though it won't provide exact numbers.

Wireless number portability, whereby subscribers can change service provider but retain their telephone number, is set to be introduced in the U.S. on November 24, and the sector is gearing up for the impact (see Verizon Preps Portability, Verizon Fights for Portability, and NeuStar's Got NightFire's Number). Industry analyst believe that up to 40 million people could switch service provider within the first year.

TeliaSonera has welcomed the introduction of the scheme in Finland, saying it's good for competition. It aims to win new and former customers with a new flat-rate service offer called Sonera One, with a set per-minute rate for voice calls within Finland and for text messages. A spokesman for the operator says this is the first flat-rate pricing scheme the operator has offered. "It was the main product we were lacking and is something the customers have been asking for," he says, adding that the new service is available from today.

TeliaSonera has two main competitors, Radiolinja Oy and DNA Finland Oy, both of which operate their own networks. They have yet to release new subscriber figures covering the number portability months.

— Ray Le Maistre, International Editor, Boardwatch

jefcoed 12/4/2012 | 11:22:06 PM
re: Sonera Takes a Portable Hit Does anyone know if the churn rate TeliaSonera experienced after WNP (21.8%, up from 10.2%) is a monthly or quarterly number. In other words, did 20% of TeliaSonera's customer base turn over every month or quarter?

Thanks
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