MNP: Idea gets advantage, RCom, BSNL lose

'No Idea, Get Idea'. Idea Cellular's campaign to woo subscribers of rival telecom companies seems to be paying it rich dividends.

The country's sixth-largest mobile operator was the biggest gainer in the first eight days of mobile number portability (MNP) being launched across the country.

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MNP, which allows mobile subscribers to change service providers while retaining numbers, was launched across the country on January 20.

According to figures made available by telecom companies to the Department of Telecommunications, Idea Cellular saw a net gain of 12,300 subscribers. Net gain is the difference between the number of subscribers who left and those who joined.

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Vodafone Essar was the second-biggest gainer, with a net addition of 11,252 subscribers, while Aircel was a distant third with 3,389 net additions. MNP seems to have had no effect on Airtel, as the country's largest operator managed a net gain of 94 customers.

The biggest loser was Reliance Communications (both GSM and CDMA), followed by state-run Bharat Sanchar Nigam and Tata Teleservices (CDMA and GSM). Reliance lost 9,837 users, while 192 chose to join its network.

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Telecom operators and analysts, however, say the loss of subscribers does not reflect the true picture, as it does not necessarily mean a loss of revenue.

That, they say, depends on the average revenue per user (ARPU) and the number of post-paid customers (who have high ARPUs) which an operator has lost or gained. On an average, a post-paid customer pays four times more than a pre-paid customer.

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To avail of MNP service, a mobile user has to pay a porting fee of Rs 19. The user has to send a message to 1900, following which he gets a unique porting code. With this code, the user can fill a form of the new service provider.

The process is expected to be completed in seven days. However, subsequently, the user cannot avail of the service again for 90 days.

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Industry experts feel MNP will not be a game-changer. Even operators are not expecting the churn due to MNP to be more than one per cent, as against the current rate of four-five per cent.

This is based on their experience in the Haryana circle, where MNP was launched in December. Haryana has seen a churn of about one per cent.

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Hemant Joshi, partner, Deloitte Haskins & Sells, said, "Pre-paid subscribers constitute 85 per cent of the total subscriber base in India. For many pre-paid users, retaining the number is not very important as buying a new SIM card is very easy. The euphoria around MNP will not last long."

He said the positive side would be that customers would have more options.

Sanjay Venkataraman, executive vice president and head of Asian Business Unit at research company Firstsource, said, "MNP has been around globally for a long time, leading to only 1.5 per cent churn.  However, we will have to wait and watch how consumers exercise the choice. So far, we have observed some increase in overall volumes."