The Mobile Number Portability (MNP) Scheme came into force on November 25, 2010, in Haryana and was later extended to other parts of the country from January 20 this year. Since then, competition has intensified to the extent that service providers are finding it hard to hold on to their existing subscriber base, leave alone attract new customers.
MNP is very affordable for any consumer, at just Rs 19 ($ 0.40), and the waiting period is not more than five days. It has helped increase competition among firms, thereby preventing any kind of monopoly control over consumers.
Any increase in competition will pave the way for improving the efficiency among service providers. It also helps break any tacit price cartel among the firms.
VODAFONE BIGGEST GAINER
After three months of MNP, initial results put out by TRAI point out that Vodafone is the biggest net gainer, followed by Idea and Bharti Airtel. Vodafone has perhaps been able to gain over the others on account of the kind of schemes it provides and its aggressive advertising. That telecom is an oligopolistic market was evident from the price war in 2009, as also in the sustained non-price competition.
The players just go all out in keeping pace with rival company's advertisement budget. Despite Tata Docomo putting out new exciting offers such as the “Pay Per Second Plan”, which essentially is per-second billing, the company could not attract as many customers as was expected.
Uninor and MTS were not well received by the people as they lacked market popularity. This price war, however, created a win-win situation for the end consumer.
What is astonishing is the net loss suffered by Reliance Communications in its both CDMA and GSM services.
In fact, barring Tata, no other GSM service provider is able to gain from the market, due to the dominance of Vodafone and Airtel.
Reliance Communications was neck-and-neck with other major players in the industry in promotional campaigns, but still it lost out. Coming to Idea, their impressive ranking seems to be anchored in their catchy slogan of “What an idea, Sirji !” The ads have etched a favourable market image.
More importantly, Idea paid heed to the satisfaction of the consumer as the base concept in one of their primary ads. The broadband plans launched by Tata, namely Tata Photon Plus, helped it retain some portion of the market and hence, still be in the reckoning in mobile technology.
ISSUES BEFORE BSNL, MTNL
India's first 3G mobile service provider, MTNL along with BSNL, suffered a net loss in subscribers after the MTP scheme. BSNL could not replicate its Andhra Pradesh success to other parts of the country.
It is high time that these public sector units overcame the mobile tower problems and took on the competition with an innovative strategies.
Tower sharing proposals given by TRAI, though not commercially viable for the established players, will help smaller service providers give at least a semblance of a fight.
This, in effect, is beneficial to consumers in terms of price reduction and better quality of service.
The companies' bugbear would be how to address their infrastructural issues and customer retention strategies.
EMERGING SCENARIO
It is too early to comment the actual of impact of MNP on consumers and firms, due to three important reasons. One, teething problems still persist in its successful implementation.
Second, almost all players have launched 3G spectrum services in the market and they are yet to penetrate fully.
Third, the new telecom policy which is expected to be implemented by the end of this calendar year, may lead to change in firm's strategies as it encourages liberal merger and acquisition through its norms.
Virgin Group has already formed a joint venture with Tata Teleservices. A few more such instances cannot be ruled out. The National Spectrum Act will also benefit the operator to reduce the cost through sharing of scarce spectrum resources. But reduction in telecom licences period from 20 years to 10 years may stall the operator's expansion plans, making it difficult to recover capital costs.
The increase in number of operators from existing four to six in each circle will intensify the competition and quality of service. The consolidation process may remain a challenge.
The firms need to take care of dropped calls, lack of coverage, poor quality of service and incorrect billing. A firm cannot simply woo the customer with lofty schemes without improving its infrastructure and customer care relationship management.
(The author is a faculty member at IBS-Hyderabad. The views are personal. >blfeedback@thehindu.co.in )