Number portability is a circuit-switch telecommunications network feature that enables end users to retain their telephone numbers when changing service providers, service types, and or locations. When fully implemented nationwide by both wire line and wireless providers, portability will remove one of the most significant deterrents to changing service, providing unprecedented convenience for consumers and encouraging unrestrained competition in the telecommunications industry. In short, this is the best method to increase the efficiency of the service provider by increasing the competition, thereby ensuring better services in all respects.
If you need assistance with writing your essay, our professional essay writing service is here to help!Essay Writing Service
From the subscribers’ perspective, this is a deceptively simple and very welcome change, because they can change wireless service providers without worrying about notifying friends, family and business contacts that their wireless number is changing. In addition, being able to ‘port’ a number from one provider to another eliminates the hassle and expenses of changing business cards, stationery, invoices and other materials for businesses.
The process of porting a wireless number across service providers starts with the placing of a voice order by the subscriber
From the wireless carrier’s perspective the change is anything, but simple. Virtually all of wireless carriers’ systems are affected. Especially any system that relies on mobile identity numbers (MINs) or mobile directory numbers (MDNs) will be affected. Examples of critical systems and processes that would be affected are: billing, customer service, order activation, call delivery, roamer registration and support, short messages service center, directory assistance, caller ID, calling name presentation, switches, maintenance and CSC systems, home location registers (HLRs), and visiting location registers (VLRs).
Huge Costs: One of the most common barriers in WNP implementation, within any country, has been the implementation cost. Service Providers have been constantly bargaining for time, based on the cost factor, from their respective governments. Referring to the recent example of the US, where each of the large carriers would need to spend $50-60 million to institute the service and an equivalent sum to maintain it. The FCC on this plea gave wireless carriers in the US another year, i.e., till November 2003, for resolving implementation issues. The experience of developed countries exhibits that local number portability for fixed wireline was introduced within two to three years of introduction of competition to incumbent state telcos. The cost estimate for the implementation of WNP in developed nations like the US can be very helpful for the other countries, who wish to think on the lines of number portability. To add on increased marketing costs are to be realized as the carriers look to lock up their current base before number portability is implemented, and then aggressively pursue the customers of other carriers thereafter.
Customer Retention/Increased Competition: Every subscriber in a race to retain its customer would like to offer its customers best services so as to save them from porting. It’s like a blessing in disguise for the customers, as they would get better service irrespective of the carrier, albeit with the same number.
Infrastructure Upgrade: To support WNP, a company has to upgrade both its hardware and software capabilities, which will amount to some cost. Software need to be upgraded to provide proper routing of calls. The carriers need to upgrade their networks to handle portability requests. The provider, which has its portability compatible would be expected to attract maximum customers and will emerge the winner.
Cost Recovery and Bill Reconciliation/Query Processing: When a customer plans to shift, the old service provider (OSP) has to perform a query to identify if there are any billing amounts pending, which they need to recover before the subscriber moves to the new service provider (NSP).
IMPLEMENTING NUMBER PORTABILITY
Let us look at some of the basic terminologies used in any porting process:
NSP: It is the recipient carrier i.e., the new service provider to which the subscriber wishes to subscribe to.
OSP: And the donor carrier is the old service provider, which the subscriber wishes to leave.
NPAC / MCH: Number Portability Administration Center (NPAC)/ MOBILE NUMBER PORTABILITY CLEARING HOUSE, the authority responsible for maintaining NP solutions in different regions.
Both the OSP and NSP carriers will have access to their own wireless network, order entry and point of sale terminals. Further, the two competing carriers’ WNP architectures will be connected at two points:
Inter carrier communications process (ICP)
Number portability administration center (NPAC).
First , the consumer who wishes to switch operators sends a request via sms to the home network for generating a UNIQUE PORTABILITY CODE (UPC).
Once the UPC has been generated, the consumer then goes fills a application form for connection with the operator of choice(recipient operator).A request is sent to the MCH ( Mobile number portability clearing house).MCH is the intermediary between the operators & consumers.
MCH then forwards the request to the donor operator requesting clearance for the particular number.MCH then gives 4 days time to the donor operator for responding to the request.
.A request goes to the retention team of the donor operator who then try to lure the consumer into staying by offering various schemes and giving assurances.
If the donor operator does not respond to the request within the 4 days , MCH clears the request on its own and forwards the request to the recipient donor as acceptance for Porting the number to the desired network.
The reason behind choosing such a topic has been purely on the basis of the continuous efforts being made since a couple of years to implement Mobile Number Portability in India but due to various reason it has been getting delayed.
The cost involved is too great because of which the telecom operators were never in favor of this move.
The biggest fear for any company would be to lose its customers and the same can be said in this case as well as many of the older players in the industry like AIRTEL & VODAFONE who were among the first players were the ones who would be on the losing end and in direct competition of the new & younger players who instead considered this move as an OPPORTUNITY to get hold of a share in the market.
Even after the implementation of MNP in INDIA , consumer blogs have been filled with complaints by consumers who have been prevented from switching operators by their home network service providers who have given them in-valid reason.
Knowing that MNP was a move that was bound to revolutionize the industry where the competition could become even more intense, service operators have already designed their retention & acquisition strategies to make the most of this opportunity.
PLAYERS IN THE TELECOM INDUSTRY
Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service provider in India. It offers its TELECOM services under the Airtel brand and is headed by Sunil Bharti Mittal. with operations in 19 countries across Asia and Africa the company offers mobile voice & data services, fixed line, high speed broadband, IPTV,DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers.
Bharti Airtel has is ranked sixth among the best performing technology companies in the world by Business Week. Airtel had over 200 million customers across its operations at the end of November 2010
Reliance Communications was formerly known as Reliance Info Com. It along with Reliance Telecom and Flag Telecom is part of Reliance Communications Ventures. It is the second largest mobile operator in India, based on number of subscribers. According to National Stock Exchange data, Anil Dhirubhai Ambani controls 66.77 per cent of the company, which accounts for more than 1.36 billion shares.
It is the flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprising of power (Reliance Energy), financial services (Reliance Capital) and telecom initiatives of the Reliance ADAG.
Bharat Sanchar Nigam Limited (BSNL) is a state-owned telecommunication company in India. It is the fourth largest cellular service provider and the largest land line telephone provider in India.
BSNL is India’s oldest and largest Communication Service Provider. It launched its 3G services in 11 cities of India on 2nd march 2009.
MTNL which operates in Mumbai and Delhi first launched 3G services in these cities.
Vodafone Essar, formally known as Hutchison Essar is a cellular operator in India that covers 23 telecom circles in India based in Mumbai.
Vodafone has a total 67% stake and the Essar Group has 33% stake in VODAFONE ESSAR.
It is the Third largest mobile phone operator in terms of revenue behind Airtel and third largest in terms of customers.
Idea Cellular is owned by Aditya Birla Group. Idea Cellular is a wireless telephony company operating in all the 22 telecom circles in India based in Mumbai. It is the 5rd largest GSM Company in India behind, Airtel, Reliance, Vodafone, and BSNL.
Idea has won the Award for “Best Billing and Customer Care Solution” for 2 consecutive years.
Aircel is a mobile phone service provider in India. It offers both prepaid and postpaid GSM cellular phone coverage throughout India.
A joint venture between Maxis Communications of Malaysia and Apollo Hospital Enterprise Ltd of India led to the establishment of AIRCEL.
Maxis have a 74% stake and the remaining 26% is with Apollo Hospitals. It is India’s fifth largest GSM mobile service provider with a subscriber base of over 27.7 million, as of October 31, 2009.
Aircel has won many awards for its services & was also honored at the World Brand Congress 2009 with three awards for Brand Leadership, Marketing Campaign & Marketing Professional of the Year.
Virgin Mobile India Limited is a cellular telephone service provider company which is a joint venture between Tata Teleservices and Richard Branson’s Virgin Group. Currently, the company uses Tata’s CDMA network to offer its services under the brand name Virgin Mobile, and it has also started GSM services in some states.
Tata Teleservices Limited (TTSL) is a part of the Tata Group of companies based in Navi Mumbai, an Indian conglomerate. It operates under the brand name Tata Indicom in various telecom circles of India.
Tata Teleservices spearheads the Group’s presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to launch CDMA mobile services in India with the Andhra Pradesh circle.
Shin, Dong Hee. and Kim, Won-Yong “A Study of Mobile Number Portability Effects in the United States”
This study investigates the effects of Mobile Number Portability by focusing on subscriber’s perceptions & behaviors.
The study showed that customers today don’t pay much priority to call quality being offered by their present service provider or the new service provider they shift to. This is because of advancement of network technologies that the call quality offered by all service providers is standardized.
Service providers have identified Customer Service and Network quality as two areas to gain competitive advantage. Developing applications also called “killer applications” is something that service providers are thinking of exploring.
Stefan Buehler and Justus Hauca “Mobile Number Portability”, Working Paper No. 0303, University of Zurich, March 2003.
This study showed that the level of competition increases among different service providers operating within a market. Also, with MNP once being effective, customers no longer will be able to identify the network they are calling. This will particularly lead to an increase in cost in those countries where calling rates for calls made to other networks are higher than calling rates for calls made to home networks.
Dong H. Shin, Won Y. Kim, (2007) “Mobile number portability on customer switching behavior: in the case of the Korean mobile market”, info, Vol. 9 Iss: 4, pp.38 – 54.
This study seeks to investigate the effect of mobile number portability (MNP) on mobile subscribers in Korea by focusing on subscribers’ perception and behavior related to MNP.
Statistical analyses in this study revealed that subscribers perceive the switching barrier still as high, discouraging subscribers from switching carriers. While MNP lowered switching costs considerably, a significant level of switching costs still remains despite MNP. Carriers develop new subscriber lock-in strategies that make them stay with current carriers.
The Economics of Number Portability: Switching Costs and Two-Part Tariffs (2008-2010)
Authors: – Aoki, Reiko; Small, John
This paper interprets number portability as a reduction of switching costs in a model of competition between telephone companies.
This paper helps us understand the different techniques that the telecom companies may apply after the implementation of Mobile Number Portability (MNP) and how it can have an impact on to their costing for every call.
It is understood through the demand & supply model that if the cost for connecting a call to its desired number increases for the telecom companies due to the implication of the technology involved , then the final cost for a call at the consumer end will also face a hike at some point of time.
In a standard set of interconnected telecommunications networks, the number
Dialed contains all information required for its successful routing. This is no
Longer true once a number has been ported however, when two extra pieces of information are required. The first is the recognition that the number dialed has been ported to another network. The second is the most up to date routing information. Porting technologies are distinguished by the way in which this extra information is supplied and used.
The different techniques involved in porting are as follows:-
The easiest way to provide number portability is to use the existing facilities for forwarding calls to a new number. Portability by means of call-forwarding can be implemented almost immediately and at minimal cost in most telephone networks. New investments in network infrastructure are avoided and the soft-ware required is already available.
Intelligent network (IN) technologies involve the construction and maintenance
of off-switch databases which map ported numbers to their new addresses. When
a ported number is dialed, the database is consulted to obtain the new address-
ing data. The different IN technologies are distinguished through the location of the databases.
If a terminating IN is installed for the purpose of achieving number portability, some fixed costs are incurred; these are associated with the hardware and software that comprises the IN. In addition, each time a customer ports their number, a once only cost of updating the IN database is incurred. Finally, calls to ported numbers impose variable costs associated with database look-ups and call re-routing. The efficiency of the call routing depends on exactly where the terminating IN database is located, and on whether drop-back is technically feasible.
The fixed costs associated with installing an originating IN are thought to be much greater than for a terminating IN, at least initially. This is because of an originating IN that all exchanges need to have access to a database as soon as one number is ported. If the intelligence was located at the B party’s end, as in the terminating IN, then databases are only needed in those geographical areas where the porting service is actually taken up.
A similar, but much more important, distinction occurs in respect of the variable costs of terminating and originating INs. Once a single number is ported, any given call might be directed at a ported number. Consequently, the IN database must be consulted for routing information for all calls. This means that the cost of completing all calls increases, irrespective of whether the called number has been ported or not.
Switching costs: – Economic discussion paper 5
Authors:-National Economic Research Associates (April 2003)
This report basically talks about the switching costs that are involved when a customer decides to change his service provider.
Switching costs can be de¬ned as the real or perceived costs that are incurred when changing supplier but which are not incurred by remaining with the current supplier.
Switching costs mean that if a customer purchases your product today, then all other things being equal they are also likely to purchase your product tomorrow.
Companies try to come up with lock in schemes which attract the customers to not to change their service providers. They usually create attractive pricing schemes that offer incentives on repeat purchases so that a “lock-in’ is created.
This report showed that even though changing providers can be a profitable move for the consumers, most of them decide not to shift. An example taken here is of that of a survey conducted in France in 1989 which showed that people usually purchased their second car from the same provider from who they had purchased their first.
The reason for this can be the different kind costs involved in the process of shifting a service provider some of which are as follows:-
The best way to define this would be to give the example of Telephone Numbers.
Before telephone number portability was introduced, customers changing telephone supplier also had to change their telephone number. For businesses in particular, the cost of informing customers and suppliers of the new telephone number can be very significant.
If the consumer has purchased a Sony Playstation, then they cannot use games for the Microsoft X-box and vice versa. In order to switch games supplier, the consumer must purchase a new console. These types of switching costs are known as compatibility costs.
The longer one stays with his current service provider, the better he would understand the need of the consumers.
Once the consumer changes his service provider, it might take some time before the service provider could familiarize himself with the needs of the consumer.
Companies create this by making their customers sign a contract for a definite time period.
Also offering schemes like “Frequent Flyers programs” where customers get additional benefits or providing incentives on repeat purchases are also known as contractual costs.
Not knowing whether the services or the product being offered by the new service are good enough to satisfy the needs.
Finding an appropriate product from an alternative supplier can take time. When changing mobile phone tariff, in order to ¬nd out what is an appropriate tariff, one has to estimate what time of day one makes most calls, whether the calls are to landlines or mobiles, what mobile network one calls most often and the need to make and receive calls abroad. If considerable time and effort is required to ¬nd a suitable product from another supplier, then a customer wishing to change supplier may incur search costs.
MOBILE NUMBER PORTABILITY :- CASE FINLAND
AUTHOR :- TIMO SMURA
In Finland, the number of ported numbers is higher than other European countries like Sweden, Denmark , Norway. This is because there are no charges applicable for changing your telecom operators.
In Finland, the services offered by telecom operators are standardized & the network quality is equally good. The level of competition is so high that it has led to a price war between operators.
To prevent customers to shift telecom operators due to the price war, operators tie their customers by issuing long service contracts.
Telecom companies rely heavily on marketing strategies to promote their brand and to remain popular among their customers. Also they get into offering free talk time & non mobile related give away to prevent customers from shifting to other networks.
As a result, MNP did not lead to major change in customer base for the telecom companies as the services were standardized and the tariff rates kept decreasing as and when the competitors decreased their rates.
If ‘differentiation strategy ‘was adopted by the telecom operators rather than ‘cost leadership ‘then surely more customers would have shifted to telecom company that offered something different & unique.
The situation in Finland can be compared to the situation in India with the competition being healthy among the large number of competitors and all having almost the same services & tariffs. It remains to be seen whether customers would opt to shift operators in the present situation or will something new & unique on the offering will lure them.
At present operators are trying to promote their brand through advertisements trying to showcase the advantage the customer will have by shifting to their network.
Mobile Number Portability Experience in different countries
It’s not necessary that Mobile number portability will have the same kind of effects in all the countries it is launched in.
The success of MNP depends on the telecom industry scenario in the country, the number of competitors, the competition etc. In some countries the effect of MNP has been greater than other countries where it was launched.
Mobile Number Portability has been most successful in countries like Hong Kong where it was first implemented in 1990, South Korea, Australia, Spain & Sweden where the churn rate has been about more than 6%.
The main reasons for this are:-
Less time taken for porting
Example: – In Australia the number gets ported in few hours and Hong Kong the same takes 1-2 days.
Less or no fees for porting.
Lead to entry of many new players in the industry so inspired the customers to change and try the new services on offer.
In some of the other countries where MNP was implemented but failed to make significant impact include Taiwan , Japan ,Singapore , Finland .
The reasons for failure were considered to be
Long & complex procedures for completion of porting.
High porting charges.
Less or no competition due to few competitors or standardized level of services.
Handset subsidies /Contract agreements among Operators & Consumers.
Example: – In France operators had to give 3 months prior notice.
In Netherlands it took 5 weeks for porting.
In Japan, through a study it was found out that consumers did not prefer changing their operators as along with call the use of email was also high and with MNP a customer could not transfer his email Id to his new operator.
Measuring the benefits of Mobile Number Portability
AUTHOR:- SEAN LYONS
As per this report, the benefits that can be attained with the introduction of Mobile Number Portability have been classified into 3 categories:-
Type 1:- Benefits obtained by all mobile customers.
Type 2:- Benefits obtained by all mobile customers.
Type 3:- Benefits obtained by those making calls to ported numbers.
Type 1 Benefits, talks about the advantages the customer enjoys after shifting to his/her desired network. This can be better network quality, tariff rates of your choice , VAS of your choice
Type 2 Benefits, talks about the benefits the customers who port from one network to another enjoy.
These are basically are the efficiency gains, improvement of quality of service, reduction in prices etc due to the strengthening of competition.
Type 3 Benefits, these are the benefits that the all mobile users will enjoy when they make calls to ported numbers. This will be relevant when one customer finds that his contacts have shifted to his home network which will lead to lower call rates as calls are being made on the home network only.
Another aspect covered by this report is that it explains the need to implement Mobile number portability in a particular country. The main advantage of implementing MNP is that it reduces cost.
In a survey done in South Korea, it was found out that the switching cost had decreased by 35% after the implementation of MNP. The reduction in switching cost has helped the new and young operators to win over subscribers which previously acted as a barrier for them. Another kind of cost that is incurred by the customer is when he/she stays with the current operator even though he is not satisfied with it.
MNP does not eliminate these costs completely because the porting process takes a particular time period during which certain number of calls might be missed , basic fee for porting is also involved. But the positive is that all of this is just a one time cost which the customer has to incur.
Implementing Mobile number portability cannot always be a profitable move. It depends on a number of issues like:-
Sufficient demand from subscribers (Minimum threshold market size)
Nature of market (Competition & Maturity)
Independent and strong regulators who can drive adoption of service.
It is very important for the market to have good amount of competition for the success of Mobile number portability.
Example: – The move to implement MNP in IRELAND was a failure as at the time of this move, there were just 2 incumbent operators and one new entrant which meant that there was hardly any competition. It was because of this that the customers found no need to use MNP and shift.
Also, the trend followed in SOUTH ASIAN countries is different from foreign countries who have implemented Mobile Number portability.
In foreign countries, the focus is more on ARPU subscriber.(Average revenue per user) where as in South Asian countries where the majority of mobile users belong to the bottom & middle level of the pyramid, do not really get influenced by extra features or services being offered. This can be compared to the situation in India where majority of users belong to the middle & lower levels. Also, the trend of ownership of multiple SIM cards is also very common in India which will play a vital role and probably be one of them main reasons behind ineffectiveness of Mobile Number portability.
RESEARCH OBJECTIVE AND METHODOLOGY
To study if the move to implement MNP will be welcomed or not
To understand the churn rate caused by MNP.
To understand the role of intermediaries in promoting a telecom brand to consumers who wish to change their service providers
A research design is purely and simply the framework or plan for a study that guides the collection and analysis of data. The survey research was used in this project, because consumer’s feedback was necessary for obtaining the data.
Primary data to be collected by the questionnaire based survey.
Secondary Data to be collected through Internet Sources, Newspaper, & magazine articles and online databases & libraries
For doing the survey research, structured questionnaire with closed-ended questions was used.
Mode of Survey
The mode of survey is personal interview with the respondents during the filling up of the questionnaires.
The sampling used for this study is probability sampling. Since the study is only meant for certain specific categories within the total population (telecom service users, in this case), a stratified random sample is going to be used.
A sample size of 175 respondents was used for the study.
This study was basically an opinion survey of 175 mobile users- regarding their views on the number portability.
15 Intermediaries were surveyed to understand their role in promoting telecom companies among customers after the introduction of MNP.
Discussions/Interviews with Telecom operators were used to gather secondary data to understand their perspective regarding MNP & its effect on the Indian telecom industry.
ANALYSIS & INTERPRETATION
Results of survey done on Consumers
Q1) What kind of plan you use?
NO OF USERS
Interpretation: – The above diagram gives us a true picture of the mobile industry where the maximum numbers of mobile connections are prepaid connections.
Nowadays, a mobile can be seen in the hands of almost every person irrespective of what he does & how much he earns.
Undoubtedly, telecom companies target consumers belonging to the upper rich class to the ones belonging to the lower middle class who help them earn more.
Q2) Which network you subscribe to?
NO OF USERS
Interpretation: – The above diagram shows the distribution of customers belonging to the different telecom operator companies.
Airtel leads the race as it happens to be one of the oldest players in the industry and is closely followed by Vodafone.
The others are either not popular among consumers due to various reasons or are just new players who are yet to form an impression in the minds of the consumers and make their presence felt in the market.
Q3) Is your current connection your first connection?
NO OF RESPONDENTS
Interpretation: – The above diagram shows that most of the people have used services of different telecom operators at some point of time in their life and a very small percentage of people have actually stuck to their first number / service provider.
This clearly shows that a consumer not necessarily will stay to with his first operator. In case he finds advantage in shifting, he would not mind that.
Q4) How many times have you changed your number/service operators in the past 2 years?
NO OF TIMES
MORE THAN THRICE
Interpretation: – As the previous diagram gave us a picture about how consumers have changed their operators at some point
Cite This Work
To export a reference to this article please select a referencing stye below:
Related ServicesView all
DMCA / Removal Request
If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: