A little-noticed public letter published on 7th December by OFCOM, the UK telecoms regulator, states that in their view resellers of telecoms services do NOT have the right to “port” all the numbers which have been allocated to them by another communications provider when, for example, they wish to switch to another wholesale provider. Only the end-user customers have an automatic portability right.

This could have a significant impact on MVNOs (Mobile Virtual Network Operators) as well as other telecoms resellers in the UK. MVNOs are companies (like Virgin Mobile, which was a pioneer in this area) which offer a branded mobile telephony service but which do not themselves operate the wireless infrastructure, instead buying wholesale access from licensed mobile operators in the country concerned. The letter, which is available here states OFCOM’s view that a communication provider which is reselling services using telephone numbers sub‑allocated to it by their wholesale provider is *not* entitled to request number portability. Most MVNOs in the UK, including even the largest ones, would fall within this category because they do not have an allocation of a block of mobile phone numbers directly from OFCOM but instead take a sub-allocation from their wholesale network operator.

The impact of this is that it becomes very much harder for MVNOs or other resellers to switch wholesale providers because this would mean all of their end-user customers having to change their telephone numbers, or else having individually to request portability. Either option is of course very unpalatable.

Although the letter doesn’t give OFCOM’s reasoning the issue would appear to turn on the question of whether an MVNO in this position would qualify as a “Subscriber” for the purpose of the number portability rules (contained in “General Condition 18” – all the general conditions are set out here). A “Subscriber” is defined there to mean any person who is a party to a contract with a provider of “Publicly Available Telephone Services”, which itself is defined to mean a service made available to the public for originating and receiving calls via telephone numbers.

OFCOM’s view appears to be that the service provided by the wholesale provider to the reseller is not a “public available telephone service” because it is not offered to the general public but only to resellers (like MVNOs). This runs counter to the assumptions that many in the industry have previously held – which was that resellers and MVNOs would in fact be entitled to “port” all of their customers’ numbers on a wholesale basis from one provider to another. The fact that they apparently cannot in fact do so seems likely to strengthen significantly the bargaining power of the providers of wholesale networks as against resellers and MVNOs when it comes to contract negotiations and (especially) renegotiations.

Options for the future

Unless OFCOM’s view is challenged then going forward perhaps the best advice to resellers and MVNOs would be to insert into their wholesale contracts a contractual obligation mirroring the regulatory one which was thought previously to apply. This would mean a contract term  under which the wholesale provider would be required to permit the porting of all the reseller’s end-user customer numbers en mass to a new provider if requested to do so, and to facilitate the process using the same industry procedures as for retail end-user number portability.

Going forward another possible solution would be for the larger MVNOs and resellers to obtain an allocation of numbers directly from OFCOM rather than a sub-allocation from their wholesale provider. This is currently very unusual but may well be worth considering.