MNP - A most awaited service by Indian Telecom Industry and by subscribers as well, is going to be a boon for both of them. Number portability would allow customers to change their service provider while retaining their old telephone numbers while switching out from one operator to another. The launch of MNP will stem an interesting battle, between companies, of winning and retaining customer. Companies on their part can lure subscribers with better tariff offers or by more advanced and better quality of services. Quality of service has been a big issue with Indian operators for long and several warnings have been issued so far by regulatory authority in the past few quarters. Moreover, MNP service is going to lend a helping hand to regulatory authority in assuring quality services for the end customer.Indian operators are not moving their head in unison over the implementation of MNP. CDMA giants like RelCom and TTSL have written to the Communication ministry urging the Government for sooner implementation of MNP while the rival GSM camp claiming that Indian Market is immature at the moment with minuscule penetration and the number portability should be introduced at a later stage when the teledensity would touch at least 25 per cent mark. Cellular Operators Authority of India (COAI) has seconded GSM players by presenting an estimate of MNP implementation cost as much as Rs. 3000 crore, which, as per them, can instead be used to set up a few thousand towers in remote areas.
TRAI doesn’t endorse the thought of being a matured/saturated market before implementing the MNP. Lessons can be learnt from earlier MNP implementations in different jurisdictions around the world. Netherlands introduced MNP when the Dutch market was in early growth phase with 27.37% penetration. Pakistan launched this service on 23rd March 2007 with a penetration of less than 10%. As far as India is concerned, in the very first phase, service will be launched in metros only where penetration level has already crossed the 40% mark.
At the moment TRAI proposes to launch only mobile number portability that mean FNP (Fixed Number Portability) would take some more time to come. TRAI wants to experience the first phase of implementation and then they would come in full swing with assortment of portability services. Moreover, in fixed telephony, numbering is based on SDCA (Short Distance Calling Area) and therefore a change in the National Numbering Plan (NNP) would be inevitable. However, the decision on FNP will bring a significant opportunity to private players as 80 per cent fixed line market share rests with public sector incumbents like BSNL and MTNL.
Types of Portability: - The options available to subscribers are:
Service Portability: - Customers can retain the same number while changing h-is/er service from one to another like from fixed service to mobile service.
Location portability: - In this service customers can retain their numbers while changing the location (Change in Circle).
Carrier Portability: - In this case customers have a choice of pre-selection of Long Distance Carrier while making calls. But, due to complexity of this technology, Indian Market has to wait for some time to get it in the country.
Operator Portability: - Customers are allowed to retain their numbers, if they want to switch over from their existing network to any other network in search of a better tariff, better service or for any other reason.
Technology, India decided to use for portability: -
Location portability: - In this service customers can retain their numbers while changing the location (Change in Circle).
Carrier Portability: - In this case customers have a choice of pre-selection of Long Distance Carrier while making calls. But, due to complexity of this technology, Indian Market has to wait for some time to get it in the country.
Operator Portability: - Customers are allowed to retain their numbers, if they want to switch over from their existing network to any other network in search of a better tariff, better service or for any other reason.
Technology, India decided to use for portability: -
To solve the call routing issues, TRAI has decided to use All-Call-Query method in which originating network first checks the location of dialed number in the central database and then routes the call directly to the recipient network. As this does not put any burden on the donor network, it is the most efficient way of call routing. This is a quite friendly technology and a better long-term solution to support number portability. It is successfully used by other countries where the MNP has already been implemented like France, Germany, Norway, Netherlands etc. There are some other routing technologies are also available but the All-Call-Query method is widely used technique for this service.
Major guidelines issued on number portability:-
An efficient regulatory procedure is vital for the success of number portability. TRAI has laid down some guidelines by its latest circular but a greater clarity is required on some other issues such as fee structure for portability, non-conformity to the timeframe and other service related issues like call routing failure of a ported number. Few important guidelines issued so far by regulatory authority of India are:
Major guidelines issued on number portability:-
An efficient regulatory procedure is vital for the success of number portability. TRAI has laid down some guidelines by its latest circular but a greater clarity is required on some other issues such as fee structure for portability, non-conformity to the timeframe and other service related issues like call routing failure of a ported number. Few important guidelines issued so far by regulatory authority of India are:
1. TRAI in its recent press release said that the Mobile Number Portability Clearing House Administrator (MCHA) should be licensed through a competitive bidding process. The MCHA and NPDB (National Portability Database) will be owned and operated by one legal entity and that entity will not have substantial equity (Equity of 10% or more) directly or indirectly in any of the telecom service providers in India and vice-versa. The cost of setting up and running MCHA and NPDB will be borne by the MNP licensee who shall recover it in the form of port transaction fee from service providers but the company shall not charge any fee from the service providers for providing them data download of ported numbers.
2. The NPDB will work as a centralized reference database and will be repository of all ported numbers in the country.
3. Operators need to maintain a local database which will be a replica image of centralized NPDB. Operators need to query their respective local database and need not approach the central database. Timely updation of local database shall be provided by central database.
4. Porting request will be initiated by the recipient operator.
5. Respective operators will have to bear the cost of upgradation of their networks.
6. In case of prepaid mobile subscriber, no credit transfer will be allowed to the new account. Subscribers have to either consume the balance or forgo it.
7. Much relief to the customer that TRAI intends to keep the breaking period (time taken from disconnection to reconnection) within three days which will be reduced to just two hours by September 2009.
8. The MNP will be applicable to within a service area only (only service portability) - No location portability will be available in first phase.
9. After the surrendering of number by ported subscriber the number will go back to original donor operator for reuse.
10. DOT will be providing a unique operator code to each operator to enable routing to ported numbers.
Challenges Ahead for operators: -
The introduction of MNP will change the rule of the game in telecom sector. Subscriber churn ratio has always been a matter of concern for telecom operators and with introduction of MNP in Indian market, churn rate may shoot up significantly which in turn would lead to drop in revenues and increased cost of subscriber acquisition. In Hong Kong, for instance, almost 30 per cent subscribers chose to port their numbers within the year after number portability was introduced but the trend didn’t last long and gradually declined to 16 per cent over the period of six years. Ironically, Pakistan has shown a different picture of MNP implementation where only 0.25 per cent subscribers have opted to port their numbers in first six months of launching.
2. The NPDB will work as a centralized reference database and will be repository of all ported numbers in the country.
3. Operators need to maintain a local database which will be a replica image of centralized NPDB. Operators need to query their respective local database and need not approach the central database. Timely updation of local database shall be provided by central database.
4. Porting request will be initiated by the recipient operator.
5. Respective operators will have to bear the cost of upgradation of their networks.
6. In case of prepaid mobile subscriber, no credit transfer will be allowed to the new account. Subscribers have to either consume the balance or forgo it.
7. Much relief to the customer that TRAI intends to keep the breaking period (time taken from disconnection to reconnection) within three days which will be reduced to just two hours by September 2009.
8. The MNP will be applicable to within a service area only (only service portability) - No location portability will be available in first phase.
9. After the surrendering of number by ported subscriber the number will go back to original donor operator for reuse.
10. DOT will be providing a unique operator code to each operator to enable routing to ported numbers.
Challenges Ahead for operators: -
The introduction of MNP will change the rule of the game in telecom sector. Subscriber churn ratio has always been a matter of concern for telecom operators and with introduction of MNP in Indian market, churn rate may shoot up significantly which in turn would lead to drop in revenues and increased cost of subscriber acquisition. In Hong Kong, for instance, almost 30 per cent subscribers chose to port their numbers within the year after number portability was introduced but the trend didn’t last long and gradually declined to 16 per cent over the period of six years. Ironically, Pakistan has shown a different picture of MNP implementation where only 0.25 per cent subscribers have opted to port their numbers in first six months of launching.
Conclusion: -
Number portability is great news for telecom subscribers as it makes a promise of letting the subscribers walk across the networks in search better options at lower prices. But, for wireless providers, there is a huge cost to be borne by them to provide this facility. In my opinion, the winner in long term would be the operators who take a positive approach to enhance the quality of their service, which would further result in attracting and retaining subscribers.
Number portability is great news for telecom subscribers as it makes a promise of letting the subscribers walk across the networks in search better options at lower prices. But, for wireless providers, there is a huge cost to be borne by them to provide this facility. In my opinion, the winner in long term would be the operators who take a positive approach to enhance the quality of their service, which would further result in attracting and retaining subscribers.
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