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Mobile Number Portability In India At Rs. 19 From Dec 31st 2009


Update  (February 20, 2010): Telecom Minister A Raja has said that the launch of MNP is going to be delayed, and will be introduced in Bangalore and Chennai in May, reports Business Line.

Update ( January 28, 2010): TRAI has postponed the launch of MNP in India from December 31, 2010 to March 31, 2010 for all circles.

Update (Dec 9, 2009): Department of Telecom (DoT) might have to reschedule the launch of mobile number portability. Please read our post 3G Auctions & Mobile Number PortabilityIn India Delayed?

Original Story (Nov 23, 2009): After structuring a framework for mobile number portability and inviting comments from telecom operators on a consultation paper, India’s telecom regulator TRAI has now announced a cap on the price a subscriber would have to pay for shifting to a new operator while retaining her existing number. The launch of MNP for metros and category A circles is scheduled for December 31, 2009 and for other circles by March 20, 2010.

(Note: Do read our previous article on Rules & Criteria For Applying For Mobile Number Portability In India)

Consumers Have To Pay Only Rs. 19 Or Less

There are 3 transactions involved in the transfer of a mobile number to another operator, of which two – the per port transaction charge and the dipping charge – are between the participating operators and mobile number portability service providers Telcordia and Syniverse. The subscriber who intends to shift to a new operator and retain her existing number will need to pay only the porting charge.

Despite varying opinions on porting charges of the 13 telcos – from a high of Rs. 200 to Rs. 20, and Economic Times’ calculation rising to Rs. 6000, TRAI has capped the porting charge at only Rs. 19. The regulator has also noted that operators are free to charge any amount less than this.

The reason it has been capped at Rs. 19 is that TRAI found no justification for the recipient operators to charge any additional amount from the subscriber over and above what it has to pay to the MNP service provider (it is called the Per Port Transaction charge). This charge has been fixed by the regulator at Rs. 19 as shown in the table.

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Operators Have To Decide Dipping Charge Within A Month

While TRAI has avoided fixing the dipping charge, the amount to be paid by operators and ILD providers to the MNP service providers, it has given them 30 days to arrive at a mutual agreement on the amount. If they do not, it will decide the price.

On Donation For Donors: Some operators had demanded that a charge be instituted to reimburse donor operators (the ones losing the subscriber to another) for their administrative costs due to MNP and loss of revenue from subscribers. TRAI has cut aside these requests and determined that there would be no compensation on this count. It “does not require the Donor Operator to carryout any significant work,” TRAI has stated.

Upgradation: Those offering basic services such as ILDs (who do not benefit from MNP but have to spend to upgrade their equipment to offer compliance with it) also demanded compensation for the new investments they will have to make. But TRAI has emphatically pointed out that, according to Clause 17.7 of Basic Licence, Clause 17.6 of ILD Lincence and Clause 2.6 of UAS Licence, licensees have to install equipment that is compatible with others’ equipment or services.

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Adoption: 7-10% PostPaid Users To Choose MNP?

Telcos predicted that the around 0.5% -20% of mobile subscribers would chose to use mobile number portability. Two unnamed marketing research organisations conducted surveys (one could be AC Neilsen, survey here) predicting the porting rate will be from 10-20% for pre-paid subscription, and upto 50% for post paid subscription. TRAI itself has estimated the porting rate to be at 10% in the first 15 months and 7%, 6% and 5% for the successive three years.

What’s also strange about this presumption is that it appears that the TRAI expects only post-paid consumers to use Mobile Number Portability. Keep in mind that India has entered a multi-SIM era, with pre-paid subscribers also using multiple SIM cards. Idea Cellular had estimated India’s multiple SIM usage as high as 20% of the subscriber base.

Keep in mind, though, that the Post-paid ARPU is believed to be substantially higher than pre-paid, as was mentioned in the FICCI-BDA report released earlier this year:

This means that even though telecom operators are downplaying the impact of Mobile Number Portability, they would be hard pressed to retain high-margin, high-ARPU customers, many of whom have been stuck with telcos that either have high network congestion networks, or just insufficient network coverage. We expect superior network coverage and customer service to be key drivers of MNP, not price.

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Related

-The Price Of Mobile Number Portability In India; New Telcos Vs Old
-Rules & Criteria For Applying For Mobile Number Portability In India
-India Mobile Number Portability Mandate Given To Telcordia And Syniverse Technologies