The launch of the much awaited mobile number portability (MNP) service announced a fortnight ago by cellular phone service providers will usher in a fresh round of competition in a market where players are jostling for space.
While on the one hand MNP provides subscribers a choice, on the other, it will compel operators to compete on several fronts and pricing could be the key.
Truly, now “the subscriber is King” and MNP is available to any subscriber — both postpaid and prepaid. MNP is technology agnostic and a CDMA customer can switch to GSM or vice versa provided the handset is compatible.
According to Mahesh Prasad, President-Marketing (Wireless Business), Reliance Communications, “A consumer could switch due to many reasons: better quality of services, better network coverage, and better customer service. There could be plethora of factors that necessitate a customer to switch over to a better operator that MNP empowers and it is a boon to a customer.” MNP per se is not going to change the industry performance indicators but will nevertheless favour those operators who can respond to market needs with alacrity as customers can pick and choose the operator who offers the right product at a right price.
Samaresh Parida, Director, Strategy, Vodafone Essar, said that “high value customers are extremely wary of changing to the new lot of service providers that have limited or untested network coverage and quality.”
Manoj Mohta, Head, Crisil Research, told The Hindu that “the impact on operating margin will be 50-100 basis points from 22-24 per cent now for those offering 3G. Those not offering 3G services will take a hit of 250-400 basis points.”
The current mobile subscriber base of around 670 million, Mr. Mohta said, could rise to around 860-875 million in four-five years of which the 3G subscribers could total around 100 million.
Besides, with MNP, 3G and policy on mergers and acquisitions, there could be consolidation in the industry in 18-24 months as those not offering 3G services will face increasing pressure on profitability.
