mobile number portability

Monarch Project & Finmarkets Ltd

Monarch Project & Finmarkets Ltd MOBILE NUMBER PORTABILITY

* For Private Circulation Only 05 OCT 2009.

Mobile Number Portability

-Keep Single Mobile Number Lifetime

2 Monarch Project & Finmarkets Ltd

Mobile Number Portability

Mobile number portability enables mobile telephone users to retain

their mobile telephone numbers when changing from one network

operator to another. It is a very important concept that should be

implemented in India where total number of mobile subscribers cross

45 crore mark at the end of August 2009. Number portability is also

likely to help new entrants into the Indian mobile-services market,

such as the Indian joint ventures of Telenor and Etisalat. The move to

introduce the MNP comes as the country's mobile subscriber base is

expanding fast, sometimes having an impact on network quality.

Presently, MNP is already existing in many developing and developed

countries across the world.

The MNP option will, however, not lead to a dramatic shift by sub-

scribers from one operator to another, as quality of service and net-

work coverage are not significant differentiators in the Indian market.

The introduction of number portability in other countries did not lead

to a significant shift by subscribers from one operator to another, and

in India too there will be an initial churn of up to 20 percent of sub-

scribers, which will then taper off. Usually, customers do more likely

to shift if new operator will introduce new services or if another op-

erator introduces an aggressive tariff plan.

Types Of Number Portability

1. Wireless number portability relates to transferability between

wireless mobile lines only and not between fixed lines and wire-

less. In most of the country this type of mobile network portabil-

ity is existing.

2. Full number portability allows transfers between both fixed

lines and mobile phone lines. Iceland, Canada and United States

are the only country in the world that offers this type of services.

Unique ID likely to replace Mobile Number

After implementation of the MNP, ones mobile number can be recog-

nized as a unique identification number. As per the announcement by

government of India to introduce Unique Identification Number, MNP

will improve the system by allocating mobile number as a unique

identification. MNP and UID will make KYC and other identification

process easy and convenient to end user as well as authority.

Number portability is

likely to help new

entrants into the Indian

mobile services market


1. Consumers allowed to switch operators only 90 days after a con-

nection is activated.

2. Consumers allowed to change operators within their registered

circle only (i.e. if you are within the Gujarat circle you can’t shift

to a Karnataka circle and so on)

TRAI had issued draft guidelines on MNP but there has been no

information on the charges to shift one’s operator. There has been

speculation though which has ranged around 300 rupees. Even now

with the implementation announced in December there is no informa-

tion of what it would cost the subscriber to shift from one operator to

another. But one thing is for sure that subscribers will have to pay

operators non-refundable porting charges for shifting their number.

Charges of MNP

Churn is expected to increase and also from the VAS players perspec-

tive wherein they could benefit due to this churn and could get better

revenue shares from operators for exclusive content that drives reve-

nues. We have also covered result of surveys conducted by Nielsen.

Impact of MNP

It will be rolling out from December 31 2009

Mobile number portability (MNP) will be implemented from December

31 in metros and category 'A' service areas, and by 20th March,

2010, in rest of the country. MNP will come under Act

“Telecommunication Mobile Number Portability Regulations, 2009”

and TRAI said the MNP facility shall be available only within a given

licensed service area.

Limitations to MNP

How many days it will take to switch operator

The operators to complete the porting of a subscriber's mobile num-

ber within a maximum of four days, with the exception of Jammu &

Kashmir, Assam, and the North East circles, where the process may

take a maximum of 12 days. However the regulator has committed to

bringing down the porting time.

One can not keep their

mobile number same

when moving to new

circle


Country MNP Implementation Date Time to Port (Days) Charge

Australia 2001 Free

Belgium Oct-02 Free

Brazil Sep-08 Free

Bulgaria Apr-08 2.56 EUR

Denmark 2001

Dominican Republic Sep-09 80.00 DOP

Ecuador Feb-09

Egypt Apr-08

Estonia Jan-05

France Jun-03 10

Germany Nov-02 25 EUR

Greece 2004

Hong Kong Mar-99

India Dec-09 4 to 12

Ireland 2003 Free

Israel Dec-07 Free

Italy Jan-02

Jordan Jun-10 1 TBD

Lithuania 2005

Luxembourg Jun-04

Macedonia Sep-08

Malaysia Aug-08 25.00 MYR

Mexico Jul-08

New Zealand Apr-07 Free

Nigeria 2007

Norway 2001

Oman Aug-06

Pakistan Mar-07

Peru Jan-10

Poland Feb-06 Free

Portugal Jan-02

Romania Dec-08 Free

Saudi Arabia Jul-06

Singapore Jun-08

Slovenia 2005 5 EUR

South Africa Nov-06

Spain 2000

Sweden Sep-01 21 Free

Taiwan Oct-05

Thailand 2010

Turkey Nov-08 Free

United Kingdom Free

Country wise MNP Implementation Date


Positives:

1. Operators who are having existing pool of strong customer base

will be able to retain customer by providing competitive services.

2. New telecom service providers can survive in the market by pro-

viding competitive tariffs and VAS.

3. ARPU is likely to improve as customer reduce number of active

connection of several operators.

Impact of MNP on Mobile Operators

Negatives:

1. Competition among telecom service providers is increasing.

2. Profit margins are likely to erode

3. Complex task to find out subscribers owns by operators as it can

change service providers when ones found better value for money

4. Cartel in the existing operators to form synergy lead to hard game

for rest of the players.

Situation of the Telecom Market post MNP

• All operators would be having the same kind of plans available to

retain customer, so customer can choose plan as per their re-

quirement and won’t switch to another operator.

• If today anyone want to switch then TTML provides the best plan,

as customer has to pay 1 Rs. For the 10 minute.

• TATA - DOCOMO is providing GSM plan of pay per second (Pulse

rate of on second). So if person talk for one second then he need

not to pay for the whole one minute, which we are paying right

now.

• TATA-DOCOMO has launched SMS services like pay per character

rather than pay per whole message in the existing plans.

• All the operators are likely to focus on the competitive plan for the

basic services like calling and messaging rather than on value

added services. Currently Vodafone and Bharti Airtel are the

leader in the value added services.

Profit margins of the

operators are likely to

erode Post MNP

Operators’ first priority

would be to focus on the

volume driven business

to retain exist ing

computer


Key takeaways from Nielsen Research Report conducted on

12,500 mobile subscribers across 50 centers in India

More than half (55%) of all respondents were generally satisfied with

their mobile operator and 48 percent were satisfied with the network

quality. Satisfaction scores on network quality dropped for almost all

operators, with Airtel, BSNL and Reliance registering the greatest

drops. 46 percent were satisfied with the network coverage area of

their operator and 43 percent were satisfied with the price they paid

for the mobile phone service by their operator.

Other areas of satisfaction included customer service experience and

quality of voice (both 42%), strength of signal, Voice & Data tariff

options and accuracy of bills (all 41%), indoor coverage (40%),

dropped calls (32%).

Loyalty to operators is seen to be higher among lower socio-economic

groups, older age groups, and among females.

The circles in which subscribers are more likely to shift are Mumbai

and Delhi Metro, UP East and West, Gujarat, Rajasthan, Andhra

Pradesh, Karnataka, Kerala, and Rest of West Bengal.

Circles in which subscribers show higher retention levels are Chennai

Metro, Haryana, Himachal Pradesh, Punjab, UP East, Rest of Ma-

harashtra (does not include Mumbai Metro), Rest of Tamil Nadu (does

not include Chennai Metro), Bihar, and Jharkhand.

TATA scores high on

network quality

Satisfaction Level

Loyalty to Operator

Churning rate

Retention rate By

circles

Who will Manage MNP Database

• Syniverse was selected to receive the license for Zone 1, which

includes the service areas of Delhi, Mumbai, Maharashtra, Gujarat

and seven others.

• MNP Interconnection Telecom solutions was granted for MNP ser-

vice Zone 2, which includes service areas of Eastern and Southern

India

The MNP implementation

will first focus on the

larger metropol itan

service areas before

moving into the rural

locations.


Intention to Switch Operator

0

5

10

15

20

25

30

Total Bharti Reliance Vodafone BSNL TATA IDEA

(

I

n

P

e

r

c

e

n

t

a

g

)

Today Post MNP

Introduction of MNP will not lead to swiftly changing the operators

Source: Nielsen Survey

Reliance, TATA, and BSNL Postpaid Subscribers are on top of

the list when it comes to making the best use of MNP facility:

Positives:

1. Subscribers would likely to have efficient services at cheapest rate.

2. Can retain one number lifetime while choosing competitive plans

from other operators.

3. CDMA users can switch to GSM network providers without changing

the handset, and hence subscribers need not to purchase the differ-

ent handset for the different network.

Impact of MNP on Mobile Subscribers:

Negatives:

1. Fees for transfer is yet not decided as new services introduced it

will cost high.

2. A subscriber is eligible to make a porting request only after 90 days

of the date of activation of his mobile connection.

3. Subscribers transferring the mobile number with some balance

amount, no credit transfer would be allowed to the new account.

4. Consumers allowed to change operators within their registered cir-

cle only (So if you are moving to another city and want to retain

your mobile number, MNP is not the answer).

Subscribers can switch

to the new network

without changing the

Handset. In India

between CDMA and GSM


Classification By Connection Type

17%

14%

19%

17%

0%

5%

10%

15%

20%

Prepaid PostpaidToday Post MNP

Classification By Spending

17% 17%16%

17% 17%

20%

0%

5%

10%

15%

20%

25%

Low Medium High

Today Post MNP

Source: MNP survey result from Nielsen

Mobile Network Portability will not likely to change churning

rate of Prepaid customer: Postpaid users were found to be more

overwhelmed by the MNP news that will help them switch networks

without their number being changed. Nielsen on Mobile Consumer

Insights indicates that business subscribers mostly from the postpaid

category are more likely to shift their service providers’ gears.

Base: Over 12,500 mobile subscribers were reviewed across 50 centers in India.

Low and medium spenders are less motivated to switch


Classification By Usage

19%

15%

17%

22%

17%

18%

0%

5%

10%

15%

20%

25%

Enterprise Business Personal

Today Post MNP

Post MNP Churning rate in the personal usage remain same


Base: Over 12,500 mobile subscribers were reviewed across 50 centers in India.

One would switch service providers because of:

Base: Mobile phone service subscribers who are likely to switch mobile phone operators


Most of the subscribers

shift to the new operators

b e c a u s e o f t h e

competitive tariff rate

offered by new operator


How one can Switch Operator without changing its number?

1. Every subscriber desirous of porting his mobile number shall make

a request in writing to the concerned Recipient Operator in such

format as may be specified by such Recipient Operator.

2. In the case of a post paid subscriber, an undertaking by the sub-

scriber that he has already paid all dues as per the last bill to the

Donor Operator

3. In the case of a pre-paid subscriber, an undertaking by the sub-

scriber to the effect that he understands and agrees that, upon

porting of the mobile number, the balance amount of talk time, if

any, at the time of porting shall lapse

4. The subscriber shall, with his request for porting, pay the porting

charge, if any.

5. The Recipient Operator, upon receipt of the porting request from a

subscriber, shall verify if the customer acquisition form is accom-

panied by all documents specified

6. A subscriber may, within twenty four hours of making a request for

porting, withdraw such request by informing the Recipient Opera-

tor in writing

7. The Donor Operator shall continue to provide all subscribed tele-

communication services to the subscriber who has sought porting

of his mobile number till the disconnection of the mobile number

8. The regulation envisage a maximum time period of four days for

the completion of porting process

9. Access Providers are required to implement All Call Query method

10. The Originating operator shall be responsible to route the call to

correct terminating network


Bharti Airtel - Neutral

• Market leader in the wireless telecom segment and Most popular

among the high spending group.

• Least competitive tariff plans and it has been offering wide range

of value added services.

• All telecom growth comes from Rural India since urban India is 95

percent penetrated already, so Bharti just need to get out India if

it wants to grow.

• Now subscribers addition is no longer remain the driver for the

growth as Indian urban market is mature and price competition will

play the major role.

Idea - Negative

• As per the survey conducted by market research firm AC Nielsen

existing Idea cellular customer less likely to change its moods to

switching post MNP.

• Not providing any unique services to attract customers.

• Post MNP company is not likely to get benefited as it targets

specific group of customer.

• Follower in the GSM space.

Reliance Communication - Positive

• Leader in the CDMA telecom services

• Company’s presence in the CDMA and GSM segment enables com-

pany to retain existing customer.

• Best available tariff plans after TATA Tele services.

• Most popular telecom operator in the rural areas

Post MNP Scenario of the telecom operator


MTNL– Positive

• First one to launch 3G technology and 3G would enable consumers

to use video calling, high speed internet access on the handset it-

self

• Existing subscribers who wish to have 3G on their mobile can

switch to the MTNL as allocation of the 3G license to the private

players will take long time

• Bharti and Vodafone is having the higher spending customers and

these group can shift to the MTNL for availing the 3G services

• MNP implementation will turnaround the company as 3G demand-

ing customer switch to the MTNL

TTML - Positive

• TTML ranked #1 in the TRAI survey as it ranked No. 1 in the over-

all customer satisfaction. It scores at 96%, only operators who

scores higher than 95%.

• Most popular in the less spending subscribers group.

• Tata DoCoMo, the GSM brand by Tata Tele services and NTT

DoCoMo is working on implementing various strategies that defi-

nitely help it stand out from the crowd

• TATA Tele services offers cheapest plan in India, within TATA net-

work as well as outside the TATA network.

• TATA - DoCoMo has started GSM services with the “pay per sec-

ond” plan and “pay per character” plan for the SMS.

• In latest month it has added 34 lakhs subscribers from its CDMA

and GSM operations.

• Existing customer is less likely to switch as company is providing

competitive plans and likely to offer value added services.

TATA Tele services offers

cheapest plan in India


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