Call transfer: Users set to port number for new experience

Telecom industry may be hit by biggest customer churn ever, due to mobile number portability.

Khyati Sinha, a Vodafone customer, is waiting for December 31. And, it has nothing to do with New Year’s eve. Sinha has been loyal to the telecom operators for over five years, but can’t wait to switch operator on that date to avail of cheaper call rates, SMSes, roaming benefits and, hopefully, see a complete overhaul of customer care experience.

Sinha is not alone. Airtel customer Juanita Gomes and RCom subscriber Rohin Kumar are desperate to change service providers after five years of using the same connection. What’s more, come December 31, they will not even be required to give up their old cellphone number while shifting to a new telecom company!

That’s because, from that date, telecom subscribers in metros like Mumbai, New Delhi, Kolkata and Chennai (telecom circle ‘A’ cities) will be able to switch their telecom carriers while retaining their phone number.

The Department of Telecommunications (DoT) has also directed that this new service, called mobile number portability (MNP), be rolled out across the country by March 2010. DoT has also fixed the ceiling for porting charges — the amount a subscriber has to pay to the recipient operator for porting his number — at Rs 19.

A sea of churn
Analysts estimate that Vodafone, Bharti Airtel, RCom and Idea — which have nearly 18 million post-paid subscribers (as of September, 2009) between them, accounting for nearly 70 per cent of the total post-paid subscriber base in India — will see the biggest subscriber churn in January.

“The high-end subscriber base, predominantly post-paid customers, will feel encouraged to switch service providers if they find services of their present operators unsatisfactory,” notes Gaurav Jaitley, a telecom analyst with Reliance Equities.

It is largely believed that, to minimise this churn, service providers will have to ensure better service quality to the 40-million post-paid subscriber base in the country. This includes providing rates equalling pre-paid call rates and even customised offerings to retain their high-end post-paid subscribers.

Tariffs may dip further
Anil Ambani, chairman, Reliance Communications, had earlier welcomed mobile number portability, saying: “This is a forward-looking initiative. It is pro-competition, pro-consumer and, above all, pro-choice. For the first time in the four metros, GSM operators will face real competition.”

While discussions on MNP have already escalated to a crescendo, the underlying benefit for users is getting value for their money.

With the implementation of MNP, subscribers can retain their numbers at a cost that will be lower than taking a new connection (at present, around Rs 50 for a new pre-paid lifetime connection).

“Intense competition has flooded the telecom market with a plethora of competitive offers from all service providers. Amid all this, we expect tariffs in the post-paid segment (rentals and roaming charges) to dip further,” says Nishna Biyani, telecom analyst at Prabhudas Lilladher.

Already, new players like Tata DOCOMO are rejoicing. “Our network is 3G-ready and put up in consultation with our partner NTT DOCOMO, which is widely known as the pioneer of 3G technology and a company on the verge of launching 4G services,” asserts Deepak Gulati, president, Tata DOCOMO.

Finally, consumer becomes the king
The number portability service ushers in the promise of telecom operators being motivated to improve services and lower prices. Bharti Airtel, Vodafone and Idea customers, say analysts, will be the first ones to jump on to the MNP bandwagon.

“These incumbent operators need to step up retention activities to retain their high-value subscribers,” warns Biyani. Some network operators have already put in motion customer retention exercises, like regular calls to customers for their feedback.

Newer telecom players like Tata DOCOMO, Aircel, Loop Mobile and MTS, among others, have launched competitive rates to lure users.

But the focus is expected to shift to network quality and further investments in technology upgrades for service providers.

“Price-sensitive customers can now easily become quality-sensitive too and switch loyalties without having to change their number if they are unhappy with the service quality of their present service providers,” underlines Jaitley of Reliance Equities.