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Number portability -- stage two
After four months of number portability AT&T Wireless is the big loser. Now the real fun starts.
April 5, 2004: 1:59 PM EDT
By Eric Hellweg, CNN/Money contributing columnist

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SAN FRANCISCO (CNN/Money) - A little more than four months into the number-portability age, April promises to be the cruelest month. The cellular industry faces the second wave of customers who want to take their numbers and run.

Consumers, not business customers, have made most of the switches thus far, and now -- at the dawn of the second quarter -- we'll start seeing enterprise customers jump onboard.

We already know who the big loser in local number portability (LNP) is: AT&T Wireless, although complaints about it have started to slow. The Federal Communications Commission reports that of the 6,640 complaints it's received on number portability since Nov. 24, 44 percent have involved AT&T Wireless.

"We've made no secret that, on balance with LNP, we've lost more customers than we've gained," says an AT&T Wireless spokesperson, noting that the company has redoubled its efforts to retain and recruit customers with some of its most aggressive pricing plans yet. It's going to need all the help it can get.

Here comes the second round

Here's why: Business customers sat out the first round of switching, but now they're ready to get on the bandwagon.

They "heard the horror stories of what was happening when LNP first hit, and couldn't afford to be without a cell number for two weeks while they made the switch," says Becky Diercks, a research director at In-Stat/MDR. Diercks released a study last month that found that business users were planning to switch carriers starting in the second quarter, now that most of the kinks have been ironed out.

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"You'll definitely start seeing enterprises switching carriers in the second and third quarters of this year," confirms Scott Ellison, an analyst with IDC.

The bad news for AT&T Wireless is that Diercks's study, which polled business users and early adopters, showed that AT&T Wireless customers were the most likely to switch.

Where to?

So where will those business customers end up? Ellison names three likely winners.

First, he says, is Verizon, which recently engaged in a bitter advertising war with AT&T Wireless over which company offers better coverage.

Second, Nextel's brand is quickly becoming synonymous with business use, and third, he says, Sprint has done a good job of touting its nationwide coverage and easy billing options.

AT & T Corporation

Of course, the white knight on the horizon for AT&T Wireless is Cingular. When Cingular's proposed takeover of AT&T Wireless goes through later this year, the latter's network coverage will immediately expand, addressing one of the most frequent criticisms leveled against the company.

But will business users glom on to Cingular?

"Enterprise customers may take a wait-and-see attitude toward Cingular," Ellison says. "They're reconsidering their contracts, but businesses don't know what Cingular will offer them."

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