Vodafone has received a formal warning from the Australian Communications Authority (ACA) for taking too long to convert users to alternative carriers.
The ACA has been investigating complaints by Telstra, Optus and Hutchinson that Vodafone was not complying with the mobile number portability (MNP) code which allows users to transfer between carriers while retaining the same telephone number.
ACA Telecommunications licensing executive manager Grant Symons said Vodafone's performance was below par and non-compliant for several months, although it now appears to be working on the problem.
"The aim right now is to achieve substantial improvement in time for Christmas," Symons said.
"The mobile number portability (MNP) code requires 90 percent of changes be completed within three hours and the reports so far have varied from day to day - some ports have been met within the required time, others have taken much longer and there doesn't seem to be any carrier-discrimination."
IDC telecommunications research manager, Warren Chaisatien, said Vodafone was the first to introduce the coupling of post-paid and contracts for mobile phone use in Australia which sparked a fundamental change in the industry and Vodafone's no-contract plans apparently involves an element of risk to the carrier.
"The longer it holds on to the number the less incentive customers have to walk away as it may take up to three days to transfer the number; they may need to use other packages to hold onto customers longer," Chaisatien said.
"I think the coupling of contract and post-paid accounts is a fundamental shift because if the business plan is a success, then competitors have no choice than to adopt a similar model."
In a statement, Vodafone said it is committed to improving the MNP performance as soon as possible and ensuring that porting is a positive experience for all mobile customers.
According to the Telecommunications Industry Ombudsman there were 27 code breaches out of a possible 1175 by carriers in the September 2004 quarter, and a 0.7 percent increase in breaches in the 2004 financial year.