The colloquium was conducted by Tahani Iqbal, Research Fellow, LIRNEasia.
Mobile number portability refers to the ability for customers to retain the same number, irrespective of the operator they choose to subscribe to. The most obvious benefit of this to customers is that it lowers switching costs. One question that arises is whether it shifts property rights to the customer – it may be still owned by the operator, but it raises an interesting debate. Other benefits to customers is that it would create a level-playing field between operators and increases competition among them.
Regarding demerits, mobile subscibers would not be able to gauge the price of a call and hence can’t exploit on on-net and offnet calling tariffs.
Rohan: Friends and family issue gets affected – at the bottom of the pyramid, such packages are popularly used (evidence from the Teleuse@BOP qualitative study).
To operators and regulators: –Technically costly to implement
In general: –Large numbers of unused handsets and it would be a Risky venture as you wouldn’t know what % of customers are likely to switch.
There is also the issue of locked handsets (although this would not be applicable to South Asia).
Minimum threshold market size – –Demand should be large enough to recover costs of implementing MNP –CBA indicates populations > 10 million as most cost effective market size; else economic failure of MNP
R: it would be interesting to see if we could estimate the year in which a country would be ready to adopt MNP (based on subscriber numbers).
Helani: what role does the MNP company play?
They manage the database of the donor company and receipient company, which provides information on the operator which the customers switches to. It is also involved in routing calls between donor company and receipient company.
Competitiveness and maturity of the market – Determines post-MNP competitiveness. In the Irish case, there were a few operators and limited competition, but they introduced MNP. Customers did not think it was profitable to port since limited operators and services, which led to poor porting rates and hence it wasn’t successful.
H: How do you measure success of MNP?
T: based on porting rates
Another precondition is regulatory control – independent and powerful, need to possess necessary resources and expertise.
In sum, regulators should determine:
- How high is demand for MNP from both subscribers and operators?
- How big is market size? Is it below the minimum threshold market size?
- What is the level of competition? How mature is the market?
- What kind of pricing model is in place?
- Will MNP spur further competition?
- How strong and independent is the regulating body?
H – if it is a mature market, where prices have been cut down and not much more is going to happen, MNP could help.
- Numbering plans – No use for operator level codes
- Technology – Need to update system as technology develops
- Cost sharing – Regulators, operators, and/or subscribers –
- Interconnection – Call routing changes may mean different rates
- Tariff regulation – MNP may mean lower burden on regulators to monitor call charge
R – regarding cost sharing, ideally, firstly, there should be cost-reflective charges. secondly, those who cause the cost should have to make the payments. Thirdly, if the receiving party were willing to pay, they could bear the costs.
R – in the US, an operator was allowed to look at the call patterns of other operators’ customers and then decide if they wants to provide incentives to a particular customers to switch to their package.
What is success? High porting rates, achieved through:
- Low porting times
- Almost zero costs to customers
- Publicity by regulators
- Entrance of new or disruptive competition
R – regarding the first point, this would depend on whether MNP company charges the porting cutomers for porting.
But, MNP can be successful even if porting rate is low; If threat of porting leads to increase in competition and better QoS.
The greater the awareness among customers of the ability to port, the more likely the success.
Case study of Pakistan:
- First South Asian country to introduce MNP in 2006
- PTA played significant role in rallying stakeholders; existing operators, including the government-owned incumbent service provider supported the initiative
- Centralized database maintained by an independent entity (Pakistan Mobile Number Portability Database (Guarantee) Limited Company), co-owned by all of the operators
- Customers pay a one time charge for porting; no recurring charges – paid to donor operator
- Recipient operator pays donor operator for transferring number
Sriganesh – E.g. when its a Hybrid model, if I am Dialog, and I have a customer who has shifted to Mobitel, would my cost be lower if I have my own database as opposed to getting information on a centralized database?
Tahani – Not necessarily.
H – how are the revenues to the MNP company? Is it based on the number of subscribers who port, eyc?
T – operators give money each year to the MNP company.
H – how is the price determined for a receipient operator to pay a donor operator?
Porting rates – not as high as expected
Reasons cited for porting
- Network performance
- Call rates
Operators report lack of awareness among subscribers.
The case study of India (MNP going to be launched)
Considering the staggered introduction of the service – MNP to be launched in select areas initially in 2009 and all India by 2010
- Increase churn rates from 3-4% to 8-10%
- Increase competition
- Reduce call rates – Budget telecom network model
- Create level playing field – New entrants in circles
Regulators understand that MNP will be useful for urban/higher-end users only.
The case study of India:
- Considered the implementation of MNP
- Did not follow through for variety of reasons: – Market size too small leads to low demand for porting; Operators not in favour of introducing service
- South Asian countries follow budget network model of service provision – Focus is on lower income users and higher network utilization, operators take advantage of long-tail markets, charging very low tariffs close to marginal costs , competitive advantages gained through product and service differentiation, MNP may not be economically viable – due to low porting rates
- Bulk of subscribers are from the BOP – Exercise multiple SIM cost saving strategies for keeping costs low, have little interest in retaining number across all operators – different phone habits due to affordability constraints, MNP may not have a significant effect on these markets
An important suggestion – one needs to distinguish between the type of customer (prepaid vs. postpaid), such that it may make more sense to offer MNP facilities to only postpaid customers.
It is important to look at the Singaporean case as well which had previously offered call forwarding facilities to customers who wishes to change their operator.
- South Asia mobile markets yet to achieve universal service provision and access, and lack the necessary factors that will ensure the success of MNP
- Importance of MNP may be declining, due to falling of switching costs
One needs to look at how this affects the use Mobile 2.0 applications – this may not be that important, however.