The Hindu Business Line : Customers have things to fear in mobile number portability

Chennai, Nov. 17 Mobile number portability (MNP) is a tool to promote competition and afford the customer freedom of choice of service provider, but we have many challenges to address, says Ms Usha Rajeev, Leader, Infocom Practice, PricewaterhouseCoopers (PwC).

“Any enhancement in the customer’s freedom of choice is welcome, however limited it may be, and so the MNP in its present avatar is a welcome step forward in the competitive market landscape, with hopefully other elements to follow,” she adds, in the course of an e-mail interaction with Business Line.

As you may be aware, the telecom scene recently witnessed a policy announcement that number portability will be introduced for mobile services, by the end of 2008, in the four metro areas.

Excerpts from the interview.

Do we need MNP?

India, as a country, is one offering the maximum choice to customers for mobile services with over 6 operators in each circle.

Customers, however, still think twice before switching over to another network, even if they are unhappy with the quality of service or costs, because of the level of effort associated with informing family and contacts of the change in telephone number.

Are there different types of portability?

Globally, in the telecom services sphere, freedom of choice to customers includes choice of landline service provider (via fixed number portability), mobile service provider (via mobile number portability), choice of long distance service provider (via carrier pre-selection) in different countries.

More advanced number portability types includes service portability, i.e., retaining the same number while switching from one service (say mobile) to another service (say fixed), and location portability, i.e., retaining the same number while moving from one geographical location to another.

Where is MNP available?

Presently, mobile (local) number portability is available in most European countries, Australia, Canada and the US, and within South Asia it was very recently mandated in Sri Lanka and Pakistan.

Long distance carrier selection is also available in several of the countries mentioned above, while full number portability between local fixed and mobile is available in far fewer countries — primarily the US and Canada.

Are we hearing about portability for the first time, closer home?

No. To leapfrog the market in parallel with the technology in telecom, TRAI (the Telecom Regulatory Authority of India) had introduced the proposals of number portability and carrier pre-selection a few years back.

But at that time, the proposals were not taken forward due to a multitude of reasons, including the costs and complexity of implementation as cited by the service providers, including the incumbents.

What are the likely benefits that the proposed MNP can offer to telecom companies?

Number portability affords benefits to service providers who will be able to attract customers from other operators by offering attractive value proposition and better quality of service.

And the challenges?

MNP implementation brings forth various challenges to be addressed.

First, the mobile service providers would have to upgrade their infrastructure to enable appropriate rerouting of calls to subscribers who have ported out of their network.

The manner of handling such routing and data management is critical as any inefficiency herein will directly lead to inefficiency in transmission and switching capacity, and could in some cases also lead to lost calls.

Also, the industry requires the maintenance and updation of a repository of ported number database — either at an individual network or at a central level.

This involves additional costs for operators initially, and on an ongoing basis.

How are these costs recovered?

Cost-recovery practices vary, among the different markets.

For example, costs may be recovered from the customers at regulator mandated/market fixed rates, or absorbed by the network to whom the customer is porting to. In some cases, these costs are not recovered.

Any other issues that are of concern to telecom companies?

Other implementation issues include: who would be responsible to implement the porting — the ‘transferor’ network, or the transferor network?

And the service time period mandation, as a customer who has requested porting could, in a transferor-led porting situation, be “held” for some length of time, as has been experienced in certain countries.

Thus, the implementation mechanism, rules and structure to be mandated are extremely critical for realisation of benefits of MNP.

So, the suggested strategy for telcos would be…?

They have to think of balancing the utilisation of scarce resources available for investment across the diverse additional investment needs like infrastructure for implementation and operation of MNP, infrastructure for improving quality of service, and ongoing additional expenditure for marketing and customer attraction and retention in an increasingly competitive market.

Do customers too have things to fear in MNP?

Yes. There are commercial and operational challenges for the customers. For instance, a prepaid subscriber will not be able to transfer unused ‘value’ of his card.

In cases where handsets are ‘locked’ to networks, the customer will require to incur additional costs for a new handset, which could become a hidden barrier to MNP.

A customer porting from one network to another may receive different type and nature of value-added services (VAS), and may therefore need to consider the availability of data/content acquired and paid for; the content may not be stored on his device, but reside with the service provider.

Also, a subscriber who has signed up for special tariffs, or long term discounts with higher upfront or other tariffs, may be able to migrate such benefits to the other operator only based on the schemes offered by the other operator.

Bio

Ms Rajeev, a chartered accountant and a Graduate member of the ICWAI, with over 20 years of experience, heads the communications industry practice of PwC in India. She works with telecom service providers, equipment manufacturers, and entertainment and media companies on a wide range of audit and business advisory engagements. Ms Rajeev is a member of the PwC Global Telecom Regulatory Group, and the PwC Centre of Excellence on Billing and Revenue Assurance.

http://InterviewsInsights.blogspot.com

Related Stories:
Number portability issue leads to war of words
Govt to usher in number portability in phases
Divergent views on mobile number portability launch

More Stories on : Interview | Telecommunications

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Tower cos line up to offer infrastructure to BSNL

Persistent’s equity share issue

Syndicate Bank’s online loan scheme

Customers have things to fear in mobile number portability