Number Portability: One Number, Multiple Operators

Last month I got an SMS from a leading CDMA operator asking me to switch over
from my GSM service provider, and promised almost the same number that I
subscribe. Falling just short of local area number portability, the new number
would have had just the first two digits changed and the rest eight would have
been the same. Though the Telecom Regulatory Authority of India has been
favoring a consultation paper on number portability, already dissenting murmurs
from various telecom operators can be heard.

With a very high growth rate in the wireless communication, number
portability seems to be the next logical step in making the market more
competitive. This would give the customer right to choose his service provider
and dump the one with which it is dissatisfied on the quality of service. While
subscribers stand to gain the maximum, the telecom companies have to invest more
in the technology, enabling number portability and maintain a high QoS to reduce
churn. According to initial estimates, number portability would result in a 10
percent additional capex for them, which in all probability would be passed on
to the users.

A crude form of number portability is call forwarding. However, to achieve
number portability the networks have to be made intelligent enough to port one
number from one network to another while maintaining a similar billing plan.

While the unwieldy large operators are likely to lose customers due to number
portability, the smaller ones who have traditionally concentrated on smaller
areas and fewer customers are likely to benefit. Though the operators boast of
good network quality and service delivery, the portability option gives no room
for error and a sensitive customer keeps the telcos on their toes for every
rupee he pays.

Globally, telephone users have been enjoying number portability since 1997
when Singapore adopted the scheme and Hong Kong did so in 1999. Though there are
very few countries where number portability has been mandated, it has overcome
the teething problems and is working fine. Even in the US, where there was lot
of opposition and hype about portability, it has worked out well and now no one
seems to complain. And India being a late entrant can learn from the experiences
and avoid the initial hiccups.

A major area of concern for the operators has been the hike in the churn
rate. The Hong Kong experience shows that after the initial spike, the churn
rate more or less stabilizes. In India, today the churn rate varies between
eight to 12 percent from operator to operator. After introduction of number
portability, they have to pull up their socks to control the already high churn.

While the customer appears to be the king in the whole plan, it cannot be
ruled out that the telcos would not levy portability charges to discourage
subscribers from moving away. The other way can be the receiving operator paying
the portability charges for the subscribers. Either ways, regulators have to be
careful in not compromising consumers' interests and also not make the whole
thing unprofitable for the telcos.

Apart from considering wireline and wireless portability, TRAI has also to
grapple with portability between CDMA and GSM networks. Though technically it is
possible to have portability between the two, the technology is not proven and
mature enough to take risks. TRAI in a way has excluded intra wireline operator
number portability as of now because of a near monopoly of BSNL. In all
probability, India would begin with local area wireless number portability and
then gradually increase the scope to different technologies, intra and inter
circle as well as between wireline, wireless and local loop networks.

The first step towards portability was taken when the numbering scheme for
mobile users was made 10 digit across all operators- CDMA and GSM both. If the
Communications and IT Minister Dayanidhi Maran succeeds in persuading the telcos
to remove the tariff distinction between local and domestic long distance calls
under the IndiaOne plan, then the matter would rest on the telecom companies to
upgrade their infrastructure to accommodate portability. It is likely that the
TRAI recommendations would get tangled in the legal jamboree and get delayed
between the bureaucratic corridors. But even with their knives drawn, sooner or
later, the operators have to hand over the choice to the consumers. They can
oppose and delay the implementation but ultimately customer is the king.

Anurag Prasad