Mobile Number Portability- Good or Bad for Operators??

The customer is already the king in India's booming telecommunications industry, and announcements about mobile number portability by the government last week are set to ensure that it will remain that way for a long time to come.

It will be a heart-warming change for millions of mobile phone subscribers in the country, when customers will be allowed to switch to a different service provider without having to surrender their existing phone number will be introduced in about a year's time.

But at least some of the service providers in the industry, if not all, will suffer the effects of even more intensified competition, and they could be expected to do everything within their powers to retain customers. In the lead time that they enjoy up to the introduction of the number portability, market leader Bharti Airtel as well as others could be expected to launch new plans to lock-in customers for a certain period of time by offering a sweeter deal.

They will need to make extra efforts to retain their corporate accounts, as well as individual high-billing users, who will undoubtedly be targeted by competitors. Additional investments to improve network reach and service quality will be called for. And costs will inevitably rise, while average revenues per user (ARPU) could remain under pressure in a more competitive environment.

Of the 10 mobile service providers in the industry with at least a million subscribers, the smaller ones such as Spice Communications and Mahanagar Telephone Nigam (MTE) , Aircel, could be at a greater risk than others, as they lack a nationwide footprint

Among the bigger companies, Reliance Communications (RCOM) has the greatest opportunity, but it also faces the biggest threat. Reliance currently offers a majority of its around 40 million customers CDMA services, while the rest of the industry offers mostly GSM services. Reliance has been looking at a far bigger presence in GSM as well, and the introduction of number portability offers it a big opportunity to steal GSM customers from competition. However, it is equally possible that its existing CDMA customers are weaned away by competition, and RCoM will have to constantly watch its back to prevent that from happening.

Number portability, however, needn't be bad news for everyone in the industry. It is a great opportunity for a service provider to differentiate from the rest of the pack by offering a truly superior service that is customized to individual users -- something that few service providers seem to be doing today.

Source: Cellular News