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MNP: The game changer

This is the fourth time that the implementation of MNP in the country has been delayed, but it will definitely not take away the sheen from it.

It is the fourth time that the implementation of Mobile Number Portability (MNP) in the country has been delayed, but it will definitely not take away the sheen from it.
There is little doubt that MNP, to be implemented in India by the end of October, is good news for subscribers.
According to a study by Nielsen research to gauge consumer attitude and behaviour toward mobile operators in India, close to one in five (18 per cent) Indian mobile phone subscribers that were interviewed said they intended to switch their operator when MNP is introduced.
The survey, which was conducted last year, included 12,500 mobile subscribers across 50 locations in India. Among the respondents, one in four Reliance Communications and Tata Indicom subscribers will be keen to change their operator when MNP is introduced, followed by close to one in five (19 per cent) of BSNL subscribers.
The numbers will vary though, depending on the subscriber base of operators. The current churn rate according to the study is 17 per cent in the industry. Bharti Airtel currently has a churn rate of 15 per cent (numbering about 16 million subscribers) and, as per the findings of the study, this is not likely to change post MNP.
RCom risks losing 25 per cent of its subscriber base, that is, about 21 million subscribers, who intend to move to another operator.
In another study conducted by IMRB International research, in seven metros with 40,000 respondents, an average 20 per cent of subscribers intended to change their existing operators post MNP commencement.
Delhi could see the highest churn at 24 per cent and Bangalore the lowest at 18 per cent. The survey also says that the propensity to switch is relatively higher among postpaid subscribers among whom three of five postpaid subscribers intended to switch, compared to one in three prepaid subscribers.
Hansal Savla, insights director, IMRB, says that operators will resort to better marketing strategies and improving the quality of service in order to prevent churn among subscribers. He says, “Not only would operators want to use MNP to their advantage by attracting subscribers of competing operators, they would also need to prevent the churn. For example, some leading operators call their subscribers, especially high ARPU (average revenue per user) subscribers, and proactively offer them plans at discounted rates.”
Savla adds, “CDMA operators are expected to be hit the hardest, as subscribers have showed interest to switch to GSM connections.
Cheenu Seshadri, chief strategy officer of CDMA operator Sistema Shyam TeleServices, recently said, “Already there are customers who have two-three SIMs and use dual-SIM enabled phones… I think there will be a minimal impact….”

Who is more likely to change operators?There have been speculations over who is more likely to shift operators – the prepaid or postpaid subscriber. While it would be easier for prepaid customers to change operator, experts from the industry say it could be postpaid users who are likely to take advantage of MNP.
According to a Nielsen study, high spenders, postpaid subscribers and business subscribers are more likely to switch operators post MNP because they use their phones twice as much as pre paid subscribers do. Post paid subscribers also use data services more. For this report, 12,500 mobile subscribers were surveyed across 50 cities in India.
Kedar Sohoni, president of the Mumbai-based research firm Informate Mobile Intelligence, says, “I do not foresee significant subscriber churn in the prepaid segment, which accounts for the majority of the subscriber base. In the postpaid segment though, there could be relatively higher churn as they are likely to be the subscribers most keen on retaining their numbers.”
He adds that although the churn due to MNP is not likely to be high in percentage terms, the absolute numbers are still likely to be attractive, especially for newer operators. “This combination of paranoia and opportunity will hopefully result in improved quality of service,” remarks Sohoni.
Sohoni also thinks that MNP is not going to rock the boat as subscribers who have several SIM cards of various operators already take advantage of different tariff offers.
The views of industry experts and operators make it clear that churn will not affect telcos’ revenues in a big way. It will just kick off more intense competition amongst them.
And, MNP will definitely be promising for subscribers as they will be able to get a better deal with regards to tariffs and plans, as well as improved service quality.

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