One nation, one number: Much hype, little gain

Just about 11 mn customers who use roaming service will benefit from the nationwide mobile-number portability

If cellphone users are allowed to retain their numbers when relocating from one telecom circle to another, which will eventually abolish roaming charges, only a limited number of subscribers will benefit.

Just about 110.8 million, or 12 per cent, of the 924 million mobile users in India use roaming services and the people who relocate is about a tenth of these. Nationwide mobile number portability will benefit only these 11 million users initially.

These subscribers are, however, important to telecom companies because they are essentially premium post-paid customers. Around 4 per cent of all mobile subscribers use post-paid services but they contribute to more than a fourth of a telecom company’s earnings.

Telecom companies will also lose roaming revenue from those that retain their number after relocation. The Telecom Regulatory Authority of India (Trai) says telecom companies earn about Rs 2,000-2,500 crore from roaming services but companies claim the impact will be Rs 13,000 crore per year.

Mobile number portability, first introduced in 2010 and restricted to within telecom zones, did not attract much attention. Only 13.96 per cent of the total cellular user base, or 129 million people, have ported their numbers so far.

Telecom companies earlier said they would need $10 million to create the infrastructure for nationwide number portability. The move will help companies with a pan-India presence win subscribers from operators whose users relocate to states they do not offer services in.

“Relocating subscribers are 1-2 per cent of the mobile user base. So it may not have a significant impact revenue. But it certainly increases the chances of retaining a subscriber who is relocating,” said Rajan Mathews, director-general of the Cellular Operators Association of India (COAI).

The Trai had earlier said free roaming was impractical and suggested a cap on charges. However, telecom experts said if roaming were free, subscribers would have talked more and the extra earnings would have neutralised the roaming revenue lost.

Tari had earlier this year reduced the cap on roaming tariffs by 29 per cent to 57 per cent. It had also capped the price of an outgoing text message while roaming at Rs 1 for local numbers and Rs 1.50 for outstation ones. The regulator will review the matter in July 2015.

According to Hemant Joshi, partner at Deloitte Haskins & Sells, “India being mostly a pre-paid market, portability is not going to have a big impact and operators are not worried. There will be no significant impact on revenue.”

WHO GAINS FROM THE ROAMING GAME?

• About 110.8 mn, or 12%, of the 924 mn mobile users in India use roaming services and the people who relocate is about a tenth of these
   
• Nationwide mobile number portability will benefit only these 11 mn users initially
   
• Telcos will also lose roaming revenue from those that retain their number after relocation
   
• Trai says telcos earn about Rs 2,000-2,500 crore from roaming services but companies claim the impact will be Rs 13,000 crore a year