Choosing an ISP or wireless service is like tattooing your sweetheart's name on your shoulder: seems like the right thing to do at the time, but you're probably in for serious regrets down the road.
Consumers are finally demanding the freedom to switch between providers when a better offer comes along.
The churn rate, or frequency with which they change providers, is already high. The wireless churn rate averages about 30 percent a year according to In-Stat/MDR, and ISP churn rates are even higher. A 2001 Forrester Research report claims that MSN experiences 57 percent turnover.
But switching isn't easy. Take wireless service. Switching from one carrier to another -- say, from Verizon Wireless to Sprint -- forces consumers to get a new phone number. This can deter them from switching, which, according to the FCC, limits consumer choice and therefore competition.
But starting Nov. 24, 2003, most of the United States' 135 million wireless subscribers will be able to keep their cell-phone numbers even if they switch carriers.
The FCC's mandate forces carriers in the 100 largest urban areas to support wireless local number portability (PDF), which also lets wireless customers keep their numbers if they switch from a wire-line to a wireless carrier.
"It's necessary for the protection of consumers," said an FCC representative. "They're being forced to stay with carriers even when they want to change." Indeed, an In-Stat/MDR survey reports that 52 percent of respondents said number portability would make them more likely to switch.
The U.S. wireless industry initially fought number portability, using the high churn rate as proof that consumers have an adequate choice of carriers.
The industry is also worried about the cost. Wireless service providers will have to spend up to $1 billion to make number portability a reality across its networks, and an additional $500 million a year to support it.
"The money we have to invest in (number portability) is money we can't invest in more coverage, more services and better products," said Sprint spokesman James Fisher.
Complaints from Sprint and other providers bought the wireless industry a one-year reprieve from the FCC; number portability was originally supposed to take effect this month.
As for ISP subscribers, AT&T research shows that 55 percent of all Internet users view changing e-mail addresses as a barrier to switching. But with the rate of new subscriptions leveling off, ISPs are trying harder than ever to lure subscribers away from their competitors. One way to do this is to make switching as simple as possible.
To this end, AT&T Worldnet, MSN and Great Barrier Reef have both started offering Esaya's TrueSwitch technology to new subscribers. The free application automates the process of migrating a new subscriber's address book, calendar and saved e-mail messages. It's particularly useful when migrating to AT&T Worldnet or MSN from AOL, which uses a proprietary e-mail client.
"The ISP market is getting saturated," said Mark Kasiraja, Esaya's co-founder. "Most ISPs are getting their customers from other ISPs. In fact, 80 percent of any ISP's users are switching from another ISP."
In early 2003, Esaya will offer a service that will help users switch between any two ISPs for a one-time price of $15 to $20, Kasiraja said, adding that final pricing has not been set. It will also add new features, such as contact information verification.
All of this gives consumers more power of choice when it comes to providers. And more time to worry about those regrettable tattoos.
