While mobile number portability would help harassed subscribers to change their operators, for the mobile services providers it will result in high churn of subscribers
Finally, mobile subscribers across the country will be able to keep their 'beloved' number unchanged despite changing their service provider. Following an order by telecom regulator Telecom Regulatory Authority of India (TRAI), from 31st December onwards, mobile subscribers would be able to change their operators while keeping their number intact. However, according to some media reports, the move may be delayed due to technical issues like network up-gradation.
Mobile Number Portability (MNP) allows subscribers to retain their existing mobile telephone number when they move from one access provider to another, irrespective of the mobile technology—or from one cellular mobile technology to another of the same access provider—in a licensed service area. This means a CDMA subscriber can opt for other a GSM or CDMA service providers and vice-versa.
For subscribers harassed by their current mobile operator, this has come as a blessing. From next year they can simply hang up on their current operator and choose another one—whom they think will provide better services and lower tariffs. However, the subscriber must have stayed with the service provider for at least 90 days before he can transport his number to another service provider.
According to the TRAI notification, subscribers changing their services provider will have to pay Rs19 as porting charge to the recipient operator. However, TRAI has said that operators are free to charge any amount lesser than or equal to this charge. This would prove to be another headache for mobile operators, already reeling under pressure due to the tariff war. Many operators may provide this service free in order to increase subscriber base.
Although MNP is beneficial for both post-paid and pre-paid subscribers, according to analysts, lower porting charge would give further impetus to prepaid churn.
“The TRAI-notified porting charges (PC) is lower than our—and industry—expectations and this would boost higher uptake of MNP among the low average revenues per user (ARPU) segement, mostly prepaid subscribers, leading to higher churn rates than current 4.5%-8.0% per month at least in the short run,” said Anand Rathi Financial Services Ltd, in a report.
The regulator feels that the facility of retention of existing mobile telephone number despite moving to a new telecom service provider would help in increasing competition between the service providers and act as a catalyst for the service providers to improve their quality of service.
This also means that incumbent mobile operators would have to upgrade network quality and customer services which may result in higher capacity expansion and operating expenditure.
However, the ongoing tariff war has discouraged fresh investments from operators, except new players, due to longer payback periods. Many incumbent mobile service providers (MSPs) have not only put on hold their expansion plans but have also reduced capacity expansion (capex) provisions.
The aggressive launch and lower tariff plans from new entrants are not only snatching away customers but are also hurting the top and bottom line of incumbent MSPs. During the recent quarter, all mobile operators have reported a sharp fall in ARPU and minutes of usage (MOU).
Although MNP may prove to be more beneficial for both post-paid and pre-paid subscribers, the question over service quality of almost all mobile operators remains a pertinent one.
According to TRAI, during the April-June quarter, the performance of wireless service providers has deteriorated as compared to the previous quarter, in respect of call set-up success rate, call drop rate, response time to the customer for assistance, complaints and percentage of complaints resolved within four weeks.
So before being wooed by a lower tariff plan or offer, subscribers going in for MNP need to check with existing subscribers of the new operator about the service and network quality. Of course, the subscriber has got an option to switch back to his original operator, once this 24-hour period gets over, he will have to wait for another 90 days before going in for another switch.
-Yogesh Sapkale [email protected]