Should operators rethink their stance on Mobile Number Portability?

Mobile Number portability, which has been a topic of discussion for several months, is finally going to be launched in the country this month.

There are various perspectives on the impact MNP is likely to have on the Indian telecom market. There has been a limited impact of MNP when it was launched in some of the global markets a few years ago. Less than 10% of the market typically opted for this facility. According to industry estimates, number portability initially launched in the state of Haryana in November witnessed around 1 lakh porting requests from subscribers, which could be the result of an initial plug.

But instead of applying that same metric directly to the India market, let us look at the key triggers and barriers for a consumer opting for number portability.

Let us look at the barriers first. India, we know, is largely a prepaid market. It is also a market with multiple SIM ownership. The cost of obtaining and retaining a SIM card has been very low. Moreover, operators that have launched services in the last 2-3 years have tried to lure users with attractive tariff plans. Historically no operator has ever said no to any new user as it was clearly in their interest to ensure they get as many subscribers as possible, especially when it was linked to spectrum allocation. This led to a scenario where a user could switch SIM cards to avail of special services or offers across operators and thus was practically living in an MNP world. Such a user would typically have lower affinity to a particular mobile number and hence the attractiveness of formal MNP would be limited to this user.

Another potential barrier could be just plain inertia or lack of understanding regarding how to go about the process of changing ones operator. A perceived lack of differentiation in the market too could lead to a user choosing to stay with the incumbent operator.

Now let us come to the triggers and opportunities. There is a significant set of single SIM users who have high affinity for their number and will not hesitate to change their operator post MNP if they are assured better quality of service. In addition, customers who are looking for 3G services but whose operators have not won 3G spectrum would certainly be in the market for MNP. That's where the opportunity lies for operators. On the one hand, they will have to ensure that their existing customers don't defect to other operators for whatever reason and on the other hand, they will have to devise strategies to attract competition customers.

Those operators who have won 3G spectrum have a definite edge to be net gainers. Having said that, there would be a large number of users who might not be interested in 3G services but are looking for just high quality 2G services. These users could potentially be in the market to change their incumbent operator. It is imperative for operators to consider these dynamics and do whatever it takes to ensure that they have the right strategy to attract new and retain existing users. It could be a combination of above and below the line activities but more importantly, ensuring that they are offering the best quality service to their users thereby generating a positive word of mouth for their brand.

Idea cellular has already started a toll free service for those who would like to go for MNP. One could go a step further and offer a 'home delivery' service to someone who wishes to go for MNP. This would greatly remove the operational barriers and lead to potential long term gains for the operator.

Another potential opportunity is the corporate sector, which typically goes for large, high value, long-term contracts with service providers for their corporate employees. There is huge potential for an operator to have significant wins if it can assure high quality of service to the corporate.

In short, there is a significant opportunity to be a net gainer in this battle depending on how aggressive you are. Conversely, those who choose to not have this two-pronged strategy of attract and retain, specifically keeping MNP in mind, are likely to lose out to those who do.