LNP Sparks Growth In Online Retailers

Companies with Web sites that offer portability say part of their appeal is allowing customers to comparison shop.

By Sue Marek
December 15, 2003
Wireless Week
© 2005, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

Not everyone in the wireless industry is overwrought by the expense and effort that were necessary to meet local number portability's Nov. 24 deadline. In fact, one segment of the industry is profiting greatly from LNP.

Since the LNP mandate went into effect last month, online retailers have experienced a tremendous surge in orders and porting requests as customers flock to online sites to compare price plans and educate themselves on LNP. 

While traditional brick-and-mortar stores also have experienced an increase in traffic thanks to the LNP mandate, online retailers believe customers are particularly interested in these online shopping alternatives because the sites allow them to comparison shop without relying solely on information from a retail sales clerk.

According to Delly Tamar, founder and CEO of LetsTalk.com, a San Francisco-based online retailer, the company doubled its orders during the first week of LNP over the previous year. "We saw a huge increase in orders," Tamar says. "It was 25 percent more than what I had expected and forecasted."

Likewise, MyRatePlan.com, an online site that provides rate plan information to consumers and then refers them to other retailers such as LetsTalk.com, also saw a surge in page views. "November was our biggest month. We had 1.5 million page views in November," says Allan Keiter, president of MyRatePlan.com.

Besides rate plan comparisons from all competitors in a market, MyRatePlan.com also provides consumers with a way to plug in their ZIP code and find out whether or not they are in one of the top 100 MSAs where number portability is available today. "People are looking for unbiased advice," Keiter says.

Although the porting process has been met with glitches and some customers have experienced long delays in getting their numbers ported, Tamar says for the most part, customers are patient with the process. "Customers realize that if it's taking time, then the problem is probably with the old provider. They aren't upset with the new provider or the retailer," Tamar says.

Online retailers, like traditional brick-and-mortar retailers, don't actually get involved in the porting process; they just forward the necessary information to the appropriate carriers. But Tamar says LetsTalk.com lets customers check the status of their orders online. "When a customer goes to a store, they don't know when the number is going to be released and they may have to go back to the store or call repeatedly. When you order it online, you can check your order status whenever you want," Tamar says.

The increase in traffic to online retailers and the ease of which porting can be handled online is leading new players to the Web. In November, InPhonic Inc. launched Wirefly Mobile, an online retail site with a proprietary re-rating tool that combines calling plan information with customer usage patterns to provide cost comparisons from seven of the top wireless operators. Like LetsTalk.com, the site also lets consumers port their existing cell phone number to their new operator.

The site launched on Nov. 24 and by late that day it had received 300,000 hits. According to David Steinberg, founder and CEO of InPhonic, Wirefly handles the number porting for six of the seven carriers it works with. The remaining carrier has chosen to handle its porting differently; however, Steinberg expects that by the end of the year Wirefly will be doing the porting for that operator as well. "In most cases, we can do the porting process," Steinberg says. And the porting can be done in the same amount of time as is typical for storefront retailers. "Porting happens within two and a half hours," Steinberg says.

Although Wirefly is joining a handful of existing online retailers, many of which have been around for a number of years, Steinberg believes Wirefly sets itself apart from the rest by offering the most selection and best rate plan comparisons. "This is the only place a consumer can see every rate plan for the top seven carriers," Steinberg says. "Plus we publish content on who has the best customer service and who has the best quality of coverage for certain markets."

Still, Wirefly's entrance into the market doesn't come as a surprise to competitors. "We're not surprised to see new entrants in the field," Tamar says. "Online is so easy and convenient. All of the sudden, this is a bigger market now."

The online retail business does have its challenges. Often, consumers use the sites to do research but then make their purchases in the actual retail store. According to Steinberg, that's just part of running an Internet business. "If only 5 percent buy, we have a home run."