Abstract
Traditionally, mobile telecommunication subscribers would have to give up their number when choosing to switch operators. As a result, subscribers faced a switching barrier which could be expected to impact switching behaviour. Subscribers tend to incur costs when deciding to switch providers. Switching costs reduce the subscriber’s incentive to switch providers, as such, firms tend to charge high prices to their existing consumer bases. The introduction of Mobile Number Portability (MNP) is aimed at reducing consumer switching costs and enhancing competition within the mobile market. MNP gives subscribers the ability to switch operators whiles retaining their number. This study evaluates the impact of the introduction of mobile number portability on switching costs and switching behaviour in South Africa. The study adopts Salies (2012) extension of the Shy (2002) model of price competition to measure the impact of the regulatory policy. The results show that MNP in South Africa resulted in a decrease of switching costs. However, the regulations have not been as effective as market dynamics in accelerating the reduction of switching costs and encouraging subscriber switching behaviour.
Keywords: number portability, switching behaviour, switching costs.