The Hindu Business Line : Mobile number portability

Characters: Avinash — businessman, age 34; Vinod — an employee in an established GSM company, age 50; Anu — B-school student, age 22; Susheela — customer, age 40.

Avinash sat down with a grunt and deposited his heavy suitcase below his seat. He gave a perfunctory smile to the three other occupants in his cubicle before whipping out his mobile. He remarked grumpily: “No signal again. I am getting fed up with my operator. Now that the Government is planning to introduce mobile number portability, these GSM service providers such as Secure Telecom have nowhere to hide. It’s shape up or ship out for them.”

Vinod coughed gently. “Err. I am Vinod. I work as Manager, Operations, in Secure, the service provider you were talking about just now.” Avinash was shocked. Anu grinned: “Hey all, I’m Anu, doing my MBA.. I see that this journey is not going to be as boring as I imagined.” Everyone laughed. There were introductions all round. The train merrily chugged along.

Portability, what?

Susheela looking slightly confused asked: “What is this mobile number portability all of you are talking about?”

Anu immediately responded: “Number portability is a feature that allows a mobile subscriber to use the same number across different parameters. The person/user has the liberty to opt for any parameter without the time-consuming exercise of letting the rest of the world know about the change of number.”

Avinash continued in the same vein: “This change can be across geographic locations, across service operators regardless of GSM/CDMA or even from mobile to fixed line. Number portability when used to transfer numbers from one service provider to another is called Mobile Number Portability (MNP). MNP is already being used in mature markets such as Singapore and the US where the tele-density is high. “Ahh” murmured Susheela thoughtfully. “This is a forward-looking initiative. It is pro-competition, pro-consumer and above all pro-choice. For the first time in the four metros, GSM operators will face real competition.”

Unfair to incumbents?

Vinod immediately interrupted: “This is actually very unfair, as it is loaded against the incumbents in the GSM mobile industry. The newer entrants in the GSM space who have applied for new licences will be the beneficiaries of the churn, as they will try to poach users from the existing players. The CDMA players would also be the beneficiaries, as comparatively higher handset costs and the phobia of sticking with one operator is no longer there.”

A vendor selling coffee and pakoras came by. Anu immediately ordered for everyone. Everyone held their cups of coffee carefully.

Avinash meanwhile had regained some of his old bluster. “C’mon, you must admit that the current players are taking things for granted. Subscribers are held ‘hostage’ by their service providers. Typically, these are business people like me, who have circulated their numbers to all their contacts and who depend to a great extent on carrying out their business through the mobile phone. It is simply impossible for them to inform everyone about the change in number and MNP.”

Anu said: “Even I think that the dice is loaded against the current GSM operators which is unfair. The current churn in the industry stands at around 3-4 per cent and this is likely to increase. This will also result in a rise in capex, since operators will have to upgrade their infrastructure to retain such customers — especially in the metros where tele-density is around 70-80 per cent.

“It would also mean additional branding and marketing spend to increase recall. Since the service providers are already operating with very low margins, instead of spending more money on upgrading their systems for MNP, the existing resources could be utilised for providing better voice quality and services to the customers.”

Problems to sort out

Susheela offered chocolates to all from her handbag. “It’s all very confusing. A number of technical and cost-sharing problems need to be sorted out before introducing mobile number portability between one service provider and another. 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. What are the other things that must be kept in mind before implementation?”

Vinod answered her: “Your chocolates are yummy. Home made are they? Hmm…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.” Anu, eating her chocolate, said: “What are the costs involved for the operators in MNP?”

Costs involved

Again Vinod answered : “Three sorts of costs are associated with the introduction of mobile number portability: system set-up costs, costs of conveyance of calls to ported numbers, and administration costs such as those incurred in closing/opening accounts and co-ordination between service providers in switching over of mobile numbers and routing calls.

“So what’s the solution to keep everyone happy?” quipped Anu.

“Like the Government is doing currently with the introduction of MNP in the four metros first, the idea is to introduce MNP in stages. It should not be done in a hurry and should be implemented after all the issues have been sorted out and all eventualities prepared for. If handled well, it will be a win-win situation for all because of the addition of high value customers to your company.

“The only factor is that, the playing field should be level so that nobody gains an unfair advantage over the other. The freer the markets are the more choices and opportunities the customers will have. This fierce competition will force the providers to offer better service because the exit barriers for the customer will be zero. Value-added services and the quality of service will be the only differentiating factors” Avinash concluded.

Avinash’s phone suddenly regained its signal. He dialled his business partner and talked for a while in hushed tones. He hung up grumbling about his business partner. He muttered to all of them: “I don’t care about MNP, can my business partner also become portable?” others grinned.

Racy@TheHindu.co.in

http://Racycases.blogspot.com

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