Our analysis since the August 09 Consultation has considered the evidence provided and the views expressed in the responses to the August 09 Consultation. Much of this evidence was focussed on our cost benefit analysis ("CBA"). The CBA is important because it estimates whether there is likely to be a net benefit of implementing direct routing and hence whether regulatory intervention may be justified.
The case for intervention is weaker as a result of adjustments we have made to the CBA following the August 09 Consultation. These have reduced the base case net present value ("NPV") of moving to direct routing for mobile originated calls to ported mobile numbers to less than 10m over 10 years. This amounts to a small average annual benefit in the range 1p to 2p per year for each mobile phone subscriber in the UK.
We consider that no regulatory intervention is appropriate at this time because of the following reasons:
- The revised NPV is positive but low.
- By its nature, the CBA reflects forecasts and assumptions. Changes to some of our forecasts or assumptions could turn the NPV negative.
- The potential benefit for consumers (assuming cost savings were fully passed thorough) is small. In a competitive market, we would expect these savings to be passed on although any dilution of those savings would further reduce the benefits to consumers.
- We recognise that there might be further benefits stemming from direct routing (which we have not quantified), but these are likely to be secondary to the substantive matter of routing efficiency.
- Our regulatory principles, aligned with widely-recognised standards of regulatory best practice are that the case for regulation must be clear - where the case is marginal, we prefer not to intervene.
Therefore, we are not making any changes to the existing regulation of number portability in relation to direct routing. We consider that this decision complies with the principle that regulatory activity should be targeted only at cases where action is needed. This decision is also in line with our bias against intervention since the case for intervention is not clear at this time.