Softbank struggles with number portability

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Japan’s new government-mandated regime to shake up the mobile sector was plunged into chaos over the weekend when Softbank said it could not cope with the large number of applications and cancellations for its cellphone services.

But Softbank’s announcement also served as unlikely proof that the six-day-old number portability rule, which allows people to change carriers without changing their number, is for the moment fulfilling the government’s hopes. Many analysts had said number portability would be a damp squib, by failing to boost the low switch-rate among mobile consumers.

Softbank shops stopped accepting applications and cancellations for the first time at 5.45pm on Saturday, and did not start accepting them again until opening time the following day.

Yesterday, Softbank made the same announcement again at about midday. Its Softbank Mobile subsidiary said it would have to make a decision day by day on whether it would be forced to do the same again.

The problem lies with Softbank’s computer system, which could not cope with a deluge of requests that was much higher than Softbank had expected.

What is not clear is whether Softbank is winning or losing market share because of number portability. Softbank Mobile told the Financial Times yesterday that both new applications and cancellations were much higher than the company had expected. But it said Softbank, the smallest of Japan’s three main mobile carriers, could not comment on whether new customers exceeded defectors, or the other way round.

A string of consumer surveys in the months leading up to number portability had suggested Softbank was at risk of large-scale desertion by customers to KDDI, Japan’s second-biggest mobile company, whose music services have progressively boosted its market share.

But hours before Tuesday’s introduction of number portability, Masayoshi Son, Softbank chief executive, generated huge media interest by announcing some eye-catching pricing plans.

These included a package that allowed Softbank mobile users to speak to each other free of charge for an unlimited amount of time outside peak hours.

Mr Son’s new pricing plans, and accompanying attacks on his rivals for excessive profits at the expense of consumers, generated bitter controversy. Some telecoms analysts said Softbank remained more expensive than its rivals for many mobile customers after taking into account its contracts’ fine print.

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