What Does MNP Really Mean?

Why do regulatory agencies mandate number portability? They feel it's because of the fact that it is good for consumers. With the advent of number portability comes a more competitive marketplace because by lifting the barrier of operator ownership of their subscribers, operators become even more focused on services. Rather than continuing price wars, in countries where MNP has been implemented, operators tend to start consumer loyalty programs, improve customer service, focus on renewal incentives, work to improve network coverage, roll out additional differentiated services.

But, is MNP over-rated in a country like India? India is different from other markets. With pre-paid customers comprising more than 85% of the Indian mobile telephony market, telecom operators are no strangers to churn. For a subscriber, the biggest impact to changing mobile numbers is not to the

subscriber, but to those individuals in the subscriber's circle of friends, family and acquaintances. However, if more than 85% of the subscriber base is on pre-paid tariff plans, the number of ports from the pre-paid base can therefore be expected to be relatively low in comparison to the base size. Churn on these tariffs is currently around 35%, which indicates that a large portion of subscribers are not particularly attached to their mobile phone numbers. The pre-paid segment of customers apparently may not be affected much because they are primarily tariff-sensitive and not overtly conscious of customer-service or value-added services. India also has a large number of mobile service providers so there is anyway an existence of competition and price wars. Add to that, there is really no distinguished service differentiation between operator to operator offerings other than network coverage that would appeal to a subscriber and make him willing to switch once portability is activated. What that means is that the task of getting number portability working in a particular market tends to decrease as the service parity between various operators in the market increases which essentially translates into a country where operators have the same or similar services at similar prices. In that case, subscribers are less likely to change their current network provider. An additional bottleneck in a market such as India with extremely high price sensitivity, implementation of number portability could be cost prohibitive and would be bad for consumers since the cost of implementing number portability would have to be paid for by subscribers. High porting fees can essentially stifle porting opportunities. For high-end post-paid subscriber, even if one is prepared to port in order to obtain a better deal or level of service, the cost of changing number can be significant. Most quality customers if they already have a service with one of the larger and more established players in the cellular market have a distinct advantage. The time taken for porting will also have a significant impact on the adoptability.

Since India also has a large number of mobile service providers, the task of getting number portability working here not only requires a platform that can scale to a very big size, but one that can also handle the complexity of so many service providers. There are a number of challenges, but the biggest challenge is to work out the details as to how exactly the process is going to work along with the ability of operators to work together to implement the solution. Alongside technical challenges, process challenges will emerge as a critical success factor for the adoption and maintenance of the MNP program. In other countries, the infrastructure developed for number portability has also been used to solve other problems like finding out where directory number resources were being exhausted. The infrastructure to make number portability possible was also used to allow numbering plan administrators to assign numbers in a more efficient manner. Overall, service providers need to adopt a strategy to focus more on approaches that encourage the desired consumer behavior and less on prevention and/or punishment. They need to take directions from customers-they will tell you what they want and even possibly show you how to do it-to overcome their first instinct to put up barriers in order to leverage customer innovation.

Kasturi Bhattacharjee
The author is associate director, telecom consulting practice, PricewaterhouseCoopers
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