Released on: October 7, 2008, 12:32 am

Press Release Author: Kieron James

Industry: Telecommunications

Press Release Summary: A recent Competition Appeals Tribunal ruling, initiated by
Vodafone, has put paid - at least in the short term - to Ofcom's plans for
recipient-led, rapid number porting and a central database (CDB) of numbers which
were to be phased in from September 2009.

Press Release Body:

A recent Competition Appeals Tribunal ruling, initiated by Vodafone, has put paid -
at least in the short term - to Ofcom's plans for recipient-led, rapid number
porting and a central database (CDB) of numbers which were to be phased in from
September 2009.

In the current scenario, a customer wishing to move to a new provider must approach
their existing operator to initiate the process. For many (and obvious) reasons,
this isn't necessarily in the customer's best interest. Recipient-led porting -
where the process is administered by the new operator - is clearly advantageous.

However, Ofcom's requirement to implement two hour porting in less than twelve
months requires tremendous work on the part of the networks. It appears unnecessary
and unduly onerous and opens the doors to slamming. It seems the regulator also
wildly underestimated the costs of implementing the new porting regime, estimating
£5m vs Vodafone's calculation of approximately £137m.

Throwing out the baby with the bath water (again)

To justify the benefits of its decision, Ofcom is required to consult all
stakeholders and such consultations must demonstrate technical rigour. However, the
Tribunal was unanimous in its view that the communications regulator had failed to
obtain and take into account all relevant evidence, had not undertaken an
appropriate impact assessment or consulted effectively with all stakeholders.

As such, Ofcom was in breach of its regulatory obligations. Commenting on the Cost
Benefit Analysis (CBA) undertaken by Ofcom, the Tribunal found that "it was not
carried out to the requisite standard and does not withstand the level of scrutiny
required... ...contained unreliable estimates of the costs of direct routing, relied
upon insufficiently justified or explained benefits, and is therefore flawed..."

Next steps

Ofcom must now consider the next steps for UKPorting - an independent company
created to oversee the project. UKPorting has undertaken a tremendous amount of
technical work around the implementation of a central database (CDB) and
recipient-led porting and the mobile operators have forced a halt on the basis of
the regulator's ambitious timescales for implementation and for the porting process
itself.

It is critical that this work is not binned and that work to implement recipient-led
porting and the CDB continues. As the Competition Appeals Tribunal concluded:

"OFCOM should seek the fresh views of the industry on the issue of altering the
current arrangements in the UK for fixed and mobile porting, on the basis of
appropriate evidence and analysis in light of the findings set out in this
judgment."

For now, the process is stalled, but Ofcom is seeking input urgently from
stakeholders on how to proceed. We must continue the excellent work which members of
UKPorting have begun, but ensure that it is not overturned by such a fundamental
"technicality" next time around.

About Zimo Communications Limited

Zimo® is a Communications Provider which operates a Public Electronic Communications
Network (PECN). Established in 2005, the company is an active member of the
Federation of Communication Services and a founder member of the Intelligent Number
Working Group. Zimo is also an accredited member of the Safebuy Assurance Scheme.


Web Site: http://www.zimo.co.uk

Contact Details: Zimo Communications Ltd
Metropolitan House
Station Road
Cheadle Hulme
Cheshire SK8 7AZ

Tel: 0800 321 3040
Fax: 0845 680 6801