From a service provider's point of view, the Indian mobile industry is still not ready for MNP. The service providers are not keen on its introduction as that would require a substantial investment in upgrades to the routing and the billing mechanisms. The cumulative losses for the Indian GSM mobile players would be around Rs 8,000 crore and increased investments could mean more bad debt. Since the service providers are already operating with very low margins, they feel that instead of spending more money on upgrading their systems for a Value Added Service (VAS), the existing resources could be utilised for providing better voice quality and services to the customers. Undoubtedly, the introduction of MNP would keep the service providers on their toes. However, in a dynamic market such as India, subscriber acquisition is happening at a tremendous pace. According to the Cellular Operators Association of India (COAI), a total of 1.09 million GSM subscribers were added in August alone! The service providers are barely keeping pace with the infrastructural upgrades required to maintain a decent Quality of Service (QOS) for their increasing subscriber base.

Frost and Sullivan believes that the telecom services sector in India requires an investment of Rs 50,000 crore over the next three years to meet the growing demand. A substantial share would be required for the mobile services market. The GSM service providers are yet to justify the huge investments made in this field and are not keen on MNP.

The service providers are also on guard against the risk of losing customers and revenues in the post-MNP era. As for the role of the regulator, there needs to be a cautious approach before issuing a directive for MNP implementation. The overall teledensity in India is still around 7 per cent and the Government's immediate concern is to raise this figure to 15 per cent by 2010 and the primary aim is to provide voice connectivity.

This target has to be achieved by the players, either state-owned like Bharat Sanchar Nigam Ltd (BSNL) or Mahanagar Telephone Nigam Ltd (MTNL), or private operators. The Government's concern should be to introduce policies that are conducive to the growth of the mobile services as a whole. MNP is a feature of mature markets where the growth rates are low and value-added services such as MNP is a good option for the new service provider to acquire customers. Several issues need to be cleared by the regulator before implementing the MNP. Primary among these are the limited mobility versus mobile services, carrier access code (CAS), finalisation of the Interconnect Usage Charges (IUC), etc. MNP implementation would only be adding more complexity to the industry, which is already seeing some major legal and operational issues.

Frost and Sullivan believes that MNP will not be implemented in India in the near future. The market will be allowed to grow at the tremendous pace and the emphasis will be on improving the services on offer. Newer VAS will be introduced, but these will not require heavy investments. Once the market matures and growth rates slow down, MNP can be introduced as a valuable offering for subscribers. It will prove to be a tool for the regulator to keep the service providers on their toes. For the moment, the regulator can start off by studying markets where MNP has been implemented and make a smooth introduction of this feature. That should provide a big relief to the business class customers. Number portability can be introduced in stages in India. Simpler portability options such as operator- and location-based portability can be introduced, followed by service-based and ultimately convergence-based portability. One interesting possibility to look for is the use of this feature as a competitive weapon by the GSM service providers against the WLL operators. The former can use this feature to attract and retain customers. However, moving up the ladder into the era of service- and convergent-portability, this advantage will be nullified.

In the future, convergence-based portability would allow players such as Bharti, Tata or Reliance to offer the same numbers across their fixed and mobile networks. The regulator must ensure that there is absolute transparency in the charges for the person calling a ported number and another receiving the call on a ported number. Only such clarity will ensure widespread usage among the Indian mobile users and make MNP a widely used feature.

(The author is an analyst with Frost and Sullivan, an international growth consulting company. Response can be sent to bbanerje@frost.com)

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