The technology is in place, the money for it does not seem
to be a problem, there is even a spirited opposition to it-mobile number
portability (MNP) should be a winner in India.
It is supposed to bring in 'real' competition among
operators, give real freedom of choice to the consumers, and in general give the
customers a stick with which to control the QoS that the operators have been
forcing down their throat. The great thing is, as the TRAI's recommendations
point out, experience in the US suggests that number portability can deliver on
its promises.
The Effect on Churn
That is a really tricky question. MNP should encourage customers to freely
move between operators, to find one that will satisfy them. On the other hand,
this increased churn should scare the operators into getting their QoS and
customer care act in place, reducing the need for shifting operators. That is
the rosy picture, and that is also probably unattainable.
Why the Opposition?
The gainers from number portability, internationally, have been the
'new' operators. However, and sadly, all except one or two mobile operators
are behaving like incumbents, even on the issue of MNP. The way they (including
the 'real incumbents') are ganging up now in opposing portability, makes one
wonder if there is any chance of a real or unreal competition leading to any
improvement in the QoS-with or without number portability.
Implementing number portability will involve capital
expenditure and network improvements on the part of the operators, just as
providing better services would. Hopefully, in the number portability regime,
the operators will have more reason to invest in customer satisfaction.
At 8%, the churn rates in India are already very high, and
MNP is likely to increase that further. Currently, operators continue to lose
money in acquiring and re-acquiring the customers. And it seems that the SPs
have factored that in their business operations.
With number portability in force, operators could even save
a neat sum of money in terms of customer acquisition costs. The operators would
not even have to spend on the new customers' SIM cards. In fact, the more
frustrated a customer, the more he is likely to keep changing operators, making
MNP a real revenue generator!
However, the problem lies not in the 'normal' customer
making the churn. The problem lies with the high-value users. A person whose
mobile bill runs into Rs 2,000 or more will probably have a lot of free time on
his hand, if he changed his phone number. Worst still, consider the cataclysmic
effects if a corporation decides to port all its mobile numbers en masse.
The Hitch
TV Ramachandran of COAI, has been informing everybody since last year that
the competition is the panacea for all ills of the telecom industry. With the
large number of operators in every circle, he claims, consumer already has
enough choice. He now adds, the money that will be spent on creating
infrastructure for portability could well be spent in catering to customers
through other means.
However, that has not happened yet. With all the network
expansion and customer acquisition drives, the customers' needs should have
been addressed. With this disregard, what options does an existing customer has?
Business needs demand that he stick with a malfunctioning number. Common sense
dictates that he shifts to a new operator.
Admittedly, most of the customer's woes today arise from
a lack of spectrum, which is beyond the service providers' control. But
customers have other woes too. Customer care has remained a big area of concern
till today. Competition has not been able to address that.
Number portability will definitely lead to an improvement
for the customers from the current state of affairs.
Too Late
There is a debate in some quarters that MNP has come in too late. Others
even say that it is too early. However, with regards to MNP, the pertinent issue
is why does it have to take one year? The current state of technological
readiness of the operators, and the availability of MNP applications can let
this facility roll out much earlier. But, maybe time will make the heart grow
fonder and consumers will churn less if they are forced to stick with their
numbers al long as possible.
Alok Singh
aloksi@cybermedia.co.in
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