1 Number Portability in Finland Markku Brummer Suomen Numerot Numpac March 2006

Number porting in Finland - key facts In Finland, a centralised number portability database known as the Master System is used for number porting in the mobile and fixed-line networks. To date, a total of 3.1 million mobile phone numbers have been ported using the Master System. In Finland there are about 5.2 million mobile phone numbers in use. No fewer than 2.1 million mobile subscribers changed operators at least once during 2003–2005. The main reasons for the popularity of number porting in Finland are: –the simplicity of the process –the fact that it does not cost anything to the end customer –the favourable commercial terms for number porting in the operator business –and the fact that the market is highly competitive.

Background Information Number portability in the mobile communications networks is provided in accordance with the Directive 2002/22/EC of the European Parliament and the Council on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive). The Directive obligates all member states of the European Union to implement number portability by the end of the national transition period ending on 25 July The requirements included in the Universal Service Directive concerning the portability of telephone numbers are included in the Finnish Telecommunications Market Act (393/2003; Para 51 § and 52 §). Under the said act, the Finnish Telecommunications Authority has issued the Decree 46C/2005 including the fixed line numbers portability on the portability of telephone numbers. According the Decree Number portability are implemented in the fixed-wire telephone network within company numbers such as 010, 020, 029 and 03 during According to the decree, telecommunications companies are jointly obligated to ensure that a “Master System” is created for the purpose of enabling number portability. Under the new Telecommunications Market Act, number portability applies both to fixed-wire and mobile telecommunications networks. However, portability between these two types of networks is not required. The operator relinquishing the number may not charge the customer for porting the number but, in contrast, the operator receiving the number may require a porting charge from the end- customer. Additionally, the relinquishing operator may require a one-off lump sum equivalent to the cost incurred from the receiving operator.

Mobile Number Portings per quarter

Suomen Numerot Numpac Numpac coordinates number porting serving as an intermediary. Numpac is a company established for management and administration purposes. It seeks only a moderate return on investment. Numpac's business concept is to offer telecom operators, at affordable rates, services that are intended for inter-operator activities and based on the statutory obligations imposed on the operators, and that benefit the telecom operators. All the mobile and fixed telephony operators in Finland are Numpac's customers. Numpac... Accenture Operators Commercial Agreement Commercial Agreement

Numpac Numpac is owned by three operators: –TeliaSonera Finland –Elisa –Finnet Numpac's organisation is extremely flat with only one employee, the managing director. For the construction and maintenance of the Master System, Numpac signed a commercial agreement with Accenture Finland Corporation

Numpac number portability services At present, Numpac offers operators mobile and fixed number porting services as well as primary network selection services. Additionally, Numpac provides a free information service for ported numbers intended for end customers required under the number porting regulation. By means of this information service, the consumer can identify the operator responsible for any mobile or fixed-line number. This information helps customers find out about the rates charged for calls to specific numbers. For the construction and maintenance of the MASTER System, Numpac signed a commercial agreement with Accenture Oy.

Mobile Number Portability Customer case unit of the donor operator Customer case unit of the receiving operator Contract I prefer to keep my old number 0A Store Number port order is entered to Master system via operator’s customer care system and process. Master system Number port order is received Port order is confirmed Porting is confirmed New subscription is connected Old subscription is disconnected New routing information is distributed to all network operators Min 5 work days Max 3 work daysMax 10 min Customer replaces the old SIM card with a new one. Customer receives a “Welcome” short message and start using the new subscription. Customer receives a short message about the confirmed date and time of the transfer Customer receives a new SIM-card via mail or in a store SIM Master system Master system

Background Information Description of the process for porting of the end-user's mobile phone number. The party ordering a new subscription signs a subscription agreement with the mobile operator confirming that the current number will be transferred from the existing mobile communications operator to the new operator. The subscriber selects the desired supplementary services from the new operator because services are not transferred from one operator to another in the process, only the actual phone number. The subscriber receives a new SIM card from the new operator after making and signing the subscription agreement. The telecommunications company receiving the number checks with the company relinquishing the number that the number involved is portable and confirms this after having been informed of the date of transfer. The customer’s old connection will remain active up until the new connection is activated. Once the new connection has been activated, the subscriber starts using it by replacing the old SIM card with the new SIM card provided by the new operator. The Master System exchanges information related to number porting between the telecommunications companies involved, stores the ported numbers and provides information on numbers that have been ported.

Implementation of number porting in Finland using the Master System A government decree stipulated that mobile phone number portability had to be implemented by 25 July 2003 using the Master System (Universal Service Directive). Subsequently, the operators launched a joint project in February 2003 and it was completed on schedule. An external project manager was recruited to oversee the project. A Cooperation between the operators has gone smoothly. In the spring of 2005 Numpac implemented a similar number porting project for the fixed-line networks.

Portable Mobile Numbers Only phone numbers can be ported. Possible answering, data or fax numbers, that the customer might have, are not ported. Prepaid numbers can be ported only if the customer has a contract about it with the operator. In practise there are no such contracts in Finland at the moment. This means that prepaid numbers cannot be ported. Other possible services added to the subscription like short codes for answering and similar services, etc. are not ported. In most cases the customers should inform the service provider that their numbers will be ported in case they prefer to continue using the additional services. Calls, text and MSS messages must be routed directly to the right network using “direct routing”.

Master System Operator C Master system distributes the lastest routing information to mobile network operators. Master system Operator B Operator A Routing data Routing data Routing data The routing data that the operator has received from the Master system enables the operator to route the call to the right operator and network directly. Example: A call from Operator C to a number 0A ported from Operator A to Operator B. Call route

Master-system connections The large mobile phone operators have M2M- connection to the Master system. The connection is a direct machine-to-machine connection linked directly between the customer’s own customer service systems and Master system. Same connection is also used to send real-time call routing information to network operators. Small and medium size mobile operators have Web- connection to Master system. Customer’s customer service center people use a Web-browser to input and manage porting information to Master system. Network operators receive call routing information in real-time via M2M-connection customers’ connections. Other customers needing information about to which operator a certain number belongs to, get it via Reference Data file that the customer can fetch through a secure connection. All connections are VPN-connections to maintain high security. Master system Large operators’ customer service with direct M2M connection from own systems to Master Small operators’ customer service with Web access to Master Information about ported numbers via Reference Data file VPN

Master-system application architecture Operator systems sending messages to the Master-system Master system browser based user interface Systems of Reference data customers Operator systems receiving messages from the Master-system

Master system server architecture The master system is a clustered system including two physically separated identical server clusters. The system is fully duplicated in order to guarantee high availability. Replication between the physically separated clusters guarantees system operation also in severe error situations.

Number porting prices in Finland The point of departure in pricing was that price-setting must be conducive to competition. The pricing system has remained unchanged since The latest price adjustments were made in the spring of The regulators have accepted that the operators may cooperate in pricing. Numpac offers three types of interfaces to the Master System: –Machine to machine –Web A –Web B All interface types are priced differently. Master System VPN Web interface Web A Web B M2M interface

Numpac's number porting price list The price consists of four components: –annual charge –monthly charge –number porting charge –helpdesk charge Operators need separate interfaces for porting mobile and fixed numbers. Numpac determines the number porting charge every month. The porting charge is based on the actual costs incurred by Numpac. In 2005 the porting charge was less than one euro. Operators are entitled to charge a donor charge from the receiving operator.

Example: All the fees associated to a number ported from Operator A to Operator B Number porting fees NUMPAC’s customers pay NUMPAC fixed yearly and monthly fees. The receiving operator pays in addition a fee per ported number. The receiving operator pays also to the donor operator an administrative fee per ported number to cover costs associated in closing the subscription. This operator specific fee is about 10 euros per ported number. The donor operator does not pay any per number porting fees to NUMPAC or the receiving operator. NUMPAC Operator BOperator A Yearly fee Monthly fee Yearly fee Monthly fee Fee per ported number Administrative fee

Reasons for the high popularity of number porting in Finland Competition-related factors –From the beginning of 2004 to the summer of 2005, competition in the Finnish mobile subscription market was extremely intense. –Price was highlighted in market communications. –Number porting has had a considerable impact on the competitive position of companies. –Price comparison between the operators has been easy for the consumer.

Reasons for the high popularity of number porting in Finland The commercial terms for number porting favour number porting –Handset subsidies for 2G are forbidden in Finland. Permitted for 3G subscriptions from 1 April –No fixed-term agreements were made with consumers before Fixed-term agreements were only used with corporate customers. –Terminating a customer relationship and making a new subscription agreement are easy. No charge for number porting is made to the end customer. –In Finland, the number of postpaid subscriptions is very high compared to prepaid subscriptions. Convenience of the number porting process –For customers, number porting is easy and free of charge. –The standard of knowledge about, and interest in, number porting in the marketplace is high. –The number porting process works smoothly. The availability of the Master System is of the highest standard.

Prospects for the future Most likely, number porting will spill over into fixed networks. Over the next few years, new service number ranges will become portable Handset subsidies for 3G subscriptions will be allowed as of 1 April An increasing percentage of new subscriptions will be for a fixed term. The relaxation of competition will decrease number porting volumes. Numpac will extend its range of services to operators.

Contact Managing Director Markku Brummer