Today I am going to enlighten you some findings on what has happened post introduction of Mobile Number Portability [MNP] in few countries.
The DoT has recently selected Telcordia & Syniverse as 3rd party neutral operators for providing porting MNP in two zones, and wants it to go live by August-09, which we believe would be delayed beyond 2009.
In most markets when MNp was introduced, the Wireless penetration was between 60% to 80%. Post introduction of MNP the churn rate in most of the markets have clearly shown an increase, but only for 6 to12 months. Majority of countries have seen large operators losing subscriber market share to competition NTt DoCoMO lost its share from 54% to 50% in Japan, France Telecom lost 2% from 50% share to 48%, SK Telecom in South Korea lost 3% from 53% to 50% and Chungwa in Taiwan lost 2% from 39% to 37%.
Wireless Operators started increasing their focus on subscriber acquisition and retention measures including, aggressive advertising, higher distribution commissions, improving quality of networks, tariff reduction, etc. which has led to fall in EBIDTA margins. Porting charges and porting time are critical as the two are inversely proportional to the use of MNP.
What do we expect in India ?
Indian wireless market act advantageous to existing operators and may partially nullify the MNP impact, such as low penetration (~33%) might allow all players to grow. Lowest tariffs (US$0.02) provide limited scope for pricing war and 92% of subscribers use pre-paid services where churn rate is already high at 45-54%. High porting charge of say Rs 1,000 or high porting time of about 10-15 days will discourage subscribers from using MNP, affordable and faster service could encourage more use/ misuse of MNP.
Wireless operators will try to serve loyal post-paid subscribers, who form ~8% of industry subscriber base but ~35% of industry revenues.
thanks
Mobile number Portability charges are Rs 19 and Max Days is 4 within which it should be completed.
5-6% post-paid subs in the
Indian market account for 20-25% of revenues and an even higher share of EBITDA. We believe
that the new operators can (and likely will) utilize an optimal price/service (given their empty
network) combination to try and upset the apple cart in the high-usage, high-value post-paid
segment.
Considering the already high churn rate in the pre-paid segment on account of service providers attempting to attract subscribers with lucrative offers, the minimal porting charges will lead to a further increase in the churn rate. The high-end subscriber base, which preferred retaining the existing numbers, will also now feel encouraged to switch service providers if they find their present operators unsatisfactory. The service providers will have to work on ensuring better service quality to subscribers, apart from providing competitive tariffs in order to benefit from the implementation of MNP.