Download - MNP
A
COMPREHENSIVE PROJECT REPORT ON
ANALYSIS OF EFFECT OF MOBILE NUMBER PORTABILITY ON CONSUMERS AND SERVICE PROVIDERS
SUBMITTED TO:
GLS INSTITUTE OF COMPUTER TECHNOLOGY
In partial fulfilment of the requirements for the award of the degree of
MASTER OF BUSENESS ADMINISTRATION
In
Gujarat Technological University
UNDER THE GUIDANCE OF
Dr. Sharif Memon, Faculty
SUBMITTED BY:
Parth Patel Govind Israni
[Enrollment No.: 117140592013] [Enrollment No.: 117140592016]
MBA SEMESTER IV MBA SEMESTER IV
GLS INSTITUTE OF COMPUTER TECHNOLOGY
MBA PROGRAMME
Affiliated to Gujarat Technological University
Ahmedabad
Batch 2011-2013
G.L.S. Institute Of Computer Technology
(GLS-MBA)
Certificate
This is to certify that Mr. Parth Patel (117140592013) and Mr. Govind Israni
(117140592016) students of G.L.S Institute of Computer Technology (GLS-MBA) has
successfully completed their Summer Project titled on “Analysis of effect of Mobile Number
Portability On Customers and Service Providers” in partial fulfilment for the requirements
of the MBA programme of Gujarat Technological University. This is their original work
and has not been submitted elsewhere.
Director Faculty Guide
(Dr. Hitesh Ruparel) (Dr. Sharif Memon)
Date:
Place: _______________
Students‟ Declaration
We (Parth Patel,Govind Israni) , hereby declare that the report for Comprehensive
Project entitled “Analysis of effect of Mobile Number Portability on
Consumers and Service Providers” is a result of our own work and our
indebtedness to other work publications, references, if any, have been duly
acknowledged.
Place: Parth Patel
Date: Govind Israni
I
PREFACE
The objective of preparing the project is to comprehend in detail how Market research
takes place in the industry. The project has been carried out as a part of academic
activity of “Comprehensive Project”.
Actual field knowledge is far better than the bookish knowledge. So to get the knowledge
of market & market analysis is essential being a student of management.
Conducting this project on market research helps us to understand the basic concept of
market, market segment, research, research methodology & research tools etc.
Basically this project contains the analysis of consumer perception towards mobile
number portability in Ahmedabad city. We have developed the questionnaire and met
several people who all have filled questionnaire which gave us data for analysis.
Recently there are many players in the market of mobile service provider. So company
wants to check the potential factor to grab the market in this tough competition.
II
ACKNOWLEDGEMENT
Through this acknowledgement, we (Parth Patel and Govind Israni) express our sincere
gratitude towards all those people who have directly and indirectly helped us in the
preparation of this project, which has been a real learning experience.
We appreciate the co-operation of the various Respondents who showed patience while
filling the questionnaire and gave their views on the industry and the thick of things of the
industry information.
Finally we would like to thank Gujarat Technological University (G.T.U) for including
such valuable concept in the curriculum which actually added some value in our lives and
made us know about the actual market conditions.
We would like to thank our guide Dr. Sharif Memon and Prof. Prashant Pareek
for giving their precious time and suggestions and mentoring us throughout the
research process. We even would like to thank the support staff of the college and
our college friends for helping us in our research work.
III
EXECUTIVE SUMMARY
True learning is born out of experience and observations. Practical experience is one of
the best types of learning as this report is practical efforts which flashes throw on
consumer behaviour on “Mobile Number Portability” of major leading players of a
telecommunication sector.
Looking to the tremendous growth of the Indian telecom industry and revolutionary tools
like MNP the industry is expected to flourish further. This grand project report contains
analysis of the study of above presented topic it makes us to know about
consumers/customers perception towards the service of mobile number portability which
is our core objective as well as scope or scenario of mobile service provider within an
economy.
The need of the study was to know the consumer perception about certain benefits and
attributes of MNP services and reasons of change for MNP. The information collected
through this will help in determining the factors that have an impact in the mind of the
consumers and what the service providers need to focus in order to retain the consumers
and attract them to MNP services.
The results of research are quite interesting as majority of the subscribers were not
willing to change to other operators. Reference, network quality and tariff charges are
some of the reason for the consumers to switch to the other service providers.
I
TABLE OF CONTENT
Sr.
no.
Topic Page
no.
Preface I
Acknowledgement II
Executive Summary III
1.1 Objectives 2
1.2 Research Design 2
1.3 Research Methodology 2
1.4 Limitations 4
2. Literature Review 6
2.1 Theoretical Developments 7
2.2 Empirical Contributions 12
2.3 Some of the Studies Related to MNP 14
3. Introduction to Telecom Industry 17
3.1 History 18
3.2 Introduction 18
3.3 Emergence as a Major Player 20
3.4 Foreign Direct Investment (FDI) 25
4. Introduction to Mobile Number Portability In India 26
4.1 What is MNP? 27
4.2 History 27
4.3 Life before MNP 29
4.4 Introduction in India 29
4.5 Salient Features of the MNP 29
4.6 Technical Details 31
1. Research Methodology 1
II
4.7 Impact on Service Providers 32
4.8 Impact on Service Providers 33
4.9 Types of MNP 34
4.10 Mobile Number Portability Process 35
4.11 Drawbacks 36
4.12 Eligibility And Conditions for Porting a Mobile Number 36
4.13 MNP in India Pros and Cons 37
4.14 Terminologies 38
4.15 Service Provider‟s Advertising Strategies using MNP 40
4.16 MNP Statistics 42
5. Data Analysis and Interpretations 45
6. Hypothesis and Markov Analysis 63
6.1 Hypothesis 1 64
6.2 Hypothesis 2 66
6.3 Hypothesis 3 68
6.4 Markov Analysis 71
7. Key Findings 73
8. Suggestions 75
9. Conclusion 77
10. Bibliography 79
11. Annexure 82
3
LIST OF TABLES
Table
no.
Topic Page
no.
2.1 Some of the studies related to MNP 16
4.1 Circle wise Teledensity 42
4.2 Zone 1 MNP request 43
4.3 Zone 2 MNP request 43
4.4 Service Provider wise Wireless Market Share 44
5.1 Analysis - Do you use a mobile phone? 46
5.2 Analysis - Which mobile phone do you use? 47
5.3 Analysis - Are you aware of MOBILE NUMBER PORTABILITY
48
5.4 Analysis - Service providers that the respondents are using currently
49
5.5 Analysis - Time duration (months) for which respondents are using service of current service provider
50
5.6 Analysis - Have you used MOBILE NUMBER PORTABILITY (MNP) service in past?
51
5.7 Analysis - To which service provider you switched from the older one using MNP
52
5.8 Analysis - Retention and Churn Rate of several service providers 53
5.9 Analysis - What are the benefits that you have got after switching to new service provider?
54
5.10 Analysis - Select the most appropriate reason for not using MNP 55
5.11 Analysis - Select the most appropriate reason for not using MNP
56
5.12 Analysis – Factor for switching to new mobile network service provider
57
5.13 Analysis – Rate your current mobile network service provider on different attributes.(Vodafone)
58
5.14 Analysis – Rate your current mobile network service provider on different attributes.(Airtel)
59
5.15 Analysis - Rate your current mobile network service provider on different attributes.(Idea)
60
5.16 Analysis - Rate your current mobile network service provider on different attributes.(Reliance)
61
5.17 Analysis – Rate your current mobile network service provider on different attributes.(Others)
62
4
LIST OF FIGURES
Figure
no.
Topics Page
no.
4.1 Country-wise Introduction of MNP 28
5.1 Analysis - Do you use a mobile phone? 46
5.2
Analysis - Which mobile phone do you use? 47
5.3 Analysis - Are you aware of MOBILE NUMBER PORTABILITY
(MNP)?
48
5.4 Analysis - Service providers that the respondents are using currently
49
5.5 Analysis - Time duration (months) for which respondents are
using service of current service provider
50
5.6 Analysis - Have you used MOBILE NUMBER PORTABILITY
(MNP) service in past?
51
5.7 Analysis - To which service provider you switched from the older
one using MNP
52
5.8
Analysis - What are the benefits that you have got after switching
to new service provider?
53
5.9 Analysis - Select the most appropriate reason for not using MNP 54
5.10 Analysis - Select the most appropriate reason for not using MNP
55
5.11 Analysis – Factor for switching to new mobile network service
provider
56
5.12 Analysis – Rate your current mobile network service provider on
different attributes.(Vodafone)
57
5.13 Analysis – Rate your current mobile network service provider on
different attributes.(Airtel)
58
5.14 Analysis - Rate your current mobile network service provider on
different attributes.(Idea)
59
5.15 Analysis - Rate your current mobile network service provider on
different attributes.(Relaince)
60
5.16 Analysis – Rate your current mobile network service provider on
different attributes.(Others)
61
1
CHAPTER 1
RESEARCH METHODOLOGY
2
1.1 OBJECTIVES
To know the awareness of MNP among mobile users in Ahmedabad region.
To study the effect of MNP on service providers.
To know the churn and retention rate of various service providers in
Ahmedabad region.
To Study and analyse factors influencing consumer perception to change their
service provider.
1.2 RESEACH DESIGN
Type of Research: - Descriptive Research
1.3 RESEARCH METHODOLOGY
1.3.1 Primary source
Primary data is information collected by the researcher or person himself whereas
secondary data is collected by others but utilized or used by the researcher.
Structured Questionnaires- A questionnaire is a research instrument consisting of a
series of questions and other prompts for the purpose of gathering information from
respondents. Questionnaires have advantages over some other types of surveys in
that they are cheap, do not require as much effort from the questioner as verbal or
telephone surveys, and often have standardized answers that make it simple to
compile data So our primary data collected from,
Questionnaire
Interview
3
1.3.2 Secondary source
Secondary data is data that has already been collected and collated by somebody
for some reason other than the current study. Relevant data collected from.
Literature review-Information regarding past studies, new strategies were gathered
from various Journals and Business Magazines and text books and World Wide Web
so our secondary data is collected from,
Industry publications
Business Articles
Business Magazines
Internet Surfing
Past reports
Government publications
1.3.3 Target Population
Mobile users in Ahmedabad region.
1.3.4 Sampling Method
a) Non probability Convenient Sampling
Convenience sampling is a type of non-probability sampling which involves the
sample being drawn from that part of the population which is close to hand. That is,
a sample population selected because it is readily available and convenient. It may
be through meeting the person or including a person in the sample when one meets
them or chosen by finding them through technological means such as the internet or
through phone. The researcher using such a sample cannot scientifically make
generalizations about the total population from this sample because it would not be
representative enough.
b) Hypothesis
Hypothesis is used to test the validity of the assumption. First of all the assumption is
made about the population parameter. Then sample data is collected, sample
4
statistics is produced and based on this information, it is decided how likely it is that
the hypothesized population parameter is correct. In our survey we have taken
following as assumption,
H0: Consumers are not satisfied regarding mobile number portability.
H1: Consumers are satisfied regarding mobile number portability.
1.3.5 Sample size
Approximately 200 mobile users.
1.3.6 Research Instrument
Questionnaire
1.4 LIMITATIONS
Every research report is subject to certain limitation. This research report is no
exception to it. The following are the limitations of the project report.
The area covered is only Ahmedabad and from this area covered one cannot
measure the trend for whole market.
Sampling type is convenient type and not targeted one; it affects the
conclusion which is not 100 per cent correct and reliable.
Technique used to conduct the project is structured questionnaire, which are
the commonly used tool & not the reliable one especially when it is used as a
single technique (without any combination).
The respondents did not show any interest in answering the questionnaire.
They felt that it was wastage of their time.
Most of the respondents were not able to understand the English language so
I need to translate the whole questionnaire in local language and then fill it.
The collection of primary data is comparatively difficult and sometimes the
question of non-response arises because the people may not like to disclose
the information.
5
Respondents to whom we questioned about the service did not take the
survey seriously and answered the questions just for the sake of answering.
Many mobile users have not yet used Number Portability so administering
questionnaire was a difficult.
The study is limited by the time constraints as well as lack of knowledge of
understanding customer‟s descriptive responses. Lack of resources like time,
mode of transportation to conduct survey.
As concept of MNP is new and unique, peoples may not be aware about
service provided by MNP.
Lack of interest of respondents.
6
CHAPTER 2
LITERATURE REVIEW
7
Majority of information on such topic obtained from different web site in which they
provided different kind of information in detail. And I also collected data from primary
research done by us by the form of online survey and personal meeting through
questionnaire. Also from different project which have been done by management
student.
So far no single theory emerged to explain competition in mobile telecommunications
and to analyse possible outcomes of implementation of Mobile Number Portability.
But there are advances of theory in some tightly related areas which provide the
necessary framework to analyze the problem through.
The structure of this review is as follows. Recent papers that investigate the issue of
MNP directly are reviewed first. Then the research that created foundation for the
analysis of MNP and telecommunication is described. Also, relevant empirical
methodology and interesting findings of empirical investigations are discussed.
2.1 THEORETICAL DEVELOPMENTS
So far only few theoretical papers concerned the problem of MNP implementation
directly. All these papers develop from the framework of network competition, as
provided by Armstrong, 1998, and Laffont et al., 1998, which are describe below,
mostly by adding switching costs to the model.
Aoki and Small (2005) is the most frequently cited paper that directly investigates the
effect of MNP implementation. This work gave the interpretation to MNP as a
reduction in switching costs accompanied by increase in fixed and marginal costs of
the firms. Their analytical investigation is focused on the MNP caused welfare
change of consumers and producers. The model is not convenient for analysis of
competition, because authors focus on entry of a 5 second firm to a market
previously monopolized by incumbent. Authors assume positive and significant
switching costs of consumers and two-part tariff pricing by both firms. They found
that on a mature market MNP leads to completely different welfare outcomes,
depending on relative sizes of switching costs, “transportation cost” and consumer
valuations.
8
They also analysed introduction of MNP on a growing market by extending the
originally two-period game with additional period. The findings for the growing market
were more precise: MNP has no effect on incumbent and improves welfare of
consumers and the entrant.
Buehler and Haucap (2004) also investigated the effect on MNP implementation on
consumers‟ welfare. Novelty of this research was consideration of the effect of MNP
on level of information available to consumers. They argue that under MNP number
prefix has no indicative power.
Callers are not able to distinguish between on-network and off-network phone
numbers and may end up paying higher average bills. They also argue that MNP
implementation will benefit entrant firm and will hurt incumbent. Buehler and Haucap
(2004) concentrate on the analysis of fixed-to-mobile calls ignoring more difficult
mobile-to-mobile case, which involves changes of market shares.
Shi, Chiang and Rhee (2002) found that when networks incur interconnection costs,
MNP may lead to higher market concentration. Their paper was motivated by
increased concentration on the Hong Kong mobile telecommunications market. They
argue that if there are large on-network discounts on a market, reduced switching
costs, after MNP implementation, could make on network discounts of the larger firm
more attractive for consumers of the small firm and result in higher switching of the
later. Shi, Chiang and Rhee (2002) do not solve the problem with new consumers on
the market, but make logical conclusion that the less competitive outcome is also 6
possible, though with new consumers equilibrium market prices are expected to
decrease. The paper also assumes two-part tariff pricing scheme resulting in per
minute prices being equal to marginal cost of providing one minute of the service.
Here it is important to underline that most of previous researches of MNP assumed
two-part tariff pricing, which lead to conclusion that variable charges equal to
marginal costs. I am going to argue that usually, in mobile telecommunications
variable charges are not equal to marginal costs. So, using linear pricing assumption
9
would be more appropriate, at least for empiric analyses of mobile
telecommunications industry.
From my prospective, recently emerged theoretical literature on Economics of MNP
has developed from two separate streams of research in Industrial Organizations:
competition in network industries and competition on markets with switching costs.
So, next goes description of the literature on network competition, followed by the
literature on switching costs. The former was established by two seminal works. The
later has richer history and naturally receives more representation in my overview.
Armstrong (1998) was among the first to develop model of network competition with
the two-way access pricing between the firms. In his model consumers did not
consider choosing number of minutes to consume, but only decided on number of
calls. The finding of the paper was that if, in a case of symmetric firms,
interconnection costs remains unregulated the firms jointly
choose it in order to maximize their profits. Besides, this is the only paper that
assumes uniform pricing by the players.
Laffont, Rey and Tirole (1998a) and Laffont, Rey and Tirole (1998b) make
generalization and refinement of the existing literature on network competition. The
models in these two papers now are basic for most researchers of Economics of
MNP.
Laffont, Rey and Tirole (1998a) developed their two-way access pricing model at the
same time as Armstrong (1998). This paper refines the notion of „balanced calling
pattern‟ and „reciprocal access pricing‟. The model developed is one of competition
in linear pricing between two networks on saturated market, where consumers are
Hotelling-differentiated. The distinguishing feature is the way the authors modeled
demand – they incorporated „balanced calling pattern and reciprocal access pricing‟
in it. Modelling consumers‟ demand in such way lately was applied in works by Shi,
2002 and Haucap, 2004.
Another stream of literature, equally important for understanding possible MNP
effects, is in analysis of switching costs.
10
Wide introduction to switching costs was started from research by Klemperer (1987a,
b), Klemperer (1988), Klemperer (1989), Farrell and Shapiro (1988). The authors
worked with two firms – two periods setup with Hotelling differentiated consumer
demand. Such important issues were studied as entry to the market with switching
costs, price dynamics on the market with switching costs, pricing on growing market
with switching costs.
Lately, Beggs and Klemperer (1992) and Padilla (1995) set up infinitely many period
models and provided analytical solutions and interpretation. These papers mostly
supported previous „two-period‟ findings. Most popular two-period model of oligopoly
with switching costs and generalization to infinite-horizon were developed by
Klemperer (1995). The generalized to infinite horizon model shows that, on average,
firms have higher incentives to exploit existing customers rather than attract new
ones. The key assumption to this finding was that market growth rate cannot exceed
100% per period. The paper also provides general classification of types of switching
costs. This paper argues that policymakers are to reduce switching costs, as the
latter result in welfare losses: switching costs reduce product variety offered to
consumer and prevent switching between products (services) by making it costly.
This was the paper to stimulate talks on implementation of MNP among policy-
makers.
We proceed with two papers that analyzed impact of switching costs on entry
decision and on price wars – Klemperer (1987) and Klemperer (1989). Model
developed in the former allowed to conclude that most effective entry deterrents are
very low and very high customer bases. Thus, low customer base signals that
incumbent may behave aggressively when entrance takes place. High base is signal
that entrant will not gain any more or less significant market share. Other conclusion
is that very high switching costs can encourage entry because very high switching
costs signal about incumbent unwillingness to fight aggressively for new customers.
The latter paper develops a four-period model of market with switching costs with an
entry. The model provides intuition for why prices decrease strongly in the first after
the entry period and then increase to a high level.
11
Farrell and Klemperer (2001) provided broad review and classification of all available
literature and findings related to switching costs. The paper provides analysis of
practically all situations where switching costs arise and do have an effect. They
approached the conventionally controversial issue of whether switching costs attract
or distract entry. The authors suggested that resolution would depend upon the size
of the switching, costs, the scale of entry, market dynamics, and existence of
economies of scale. They also analyzed the competition strategy called penetration
pricing, when firm gives up present periods profits to build-up market share and
receive higher profits in the future.
Where present profits are assumed to be increasing in prices, market share is
decreasing in prices, and future discounted profits are increasing in market share.
Therefore, the important trade-off is the one between present-period and
futureperiods gains.
Several later papers tried to adjust the „basic‟ switching costs models for the
complications of real life. Issues studied include heterogeneity of consumers
(low/high willingness to pay), non-linear pricing (two-part tariff), quality of services
(coverage), self-competition (complementarily between different services profiles of
the same company) etc.
Among papers that concentrate on heterogeneity of consumers by their willingness
to pay and on non-linear pricing are Gabrielsen and Vagstad (2002) and Corrocher
and Zirulia (2005). Each paper develops theoretical model based on previous studies
and comes to useful conclusion. The former paper found that when firms use two-
part tariff, oligopoly produces no dead-weight losses, and the only item affected is
distribution of surplus between producers and consumers.
The later paper introduces two-part tariff into model developed by Klemperer 1987
and finds convergence in market shares – there is inverse relation between growth in
share of market leader in the market of consumers with high willingness to pay and
the share in the market of consumers with low willingness to pay.
Capuano (2002) develops a model of substitution effect between old and new
customers for an operator that charges lower prices for new customers while
12
keeping prices for old customers unchanged. This paper drops assumption that firm
can‟t charge different prices for “old” and “new” customers and thus reflects the
reality of the industry better. It warns that when market matures losses from old
customers shifting to a new cheaper charge profiles can destroy profits from new
customers demand.
Valetti (1999) and Campo-Rembado and Sundararajan (2002) draw attention to
quality issues in competition between mobile operators. The former paper used
coverage as proxy for quality and the latter recognized that loss-rates is much better
reflection of quality but coverage is just one of the many determinants of quality.
Two-stage model of the latter paper shows that because of constraints on spectrum
availability and infrastructure operators with higher market share usually provide
higher quality of services.
Theory often provided contradictory results, as for example, whether firms operating
on a market with switching costs will chose to rip their customer base or engage in
penetration pricing. Considering MNP no work was dedicated to Mobile-to-Mobile
interconnection, and also though much preparatory work was done, no model to
predict impact of MNP on market competition was developed.
2.2 EMPIRICAL CONTRIBUTIONS
Naturally that number of empirical papers on the issue of the effect of MNP is smaller
than that of the theoretical ones. Actually, empirical work aiming at investigation
outcome of MNP on market competition and welfare was conducted by either NRAs
or by consulting firms for NRAs (NERA/Smith, 1998). Other empirical papers,
conducted by academicians aim at detecting switching costs and also at quantifying
how switching costs decrease when MNP is introduced (Kim,2005).
Already mentioned empirical paper by NERA/Smith (1998) was the result of
extensive data – collection process and market research and analysis.
Representative sample of personal mobile customers as well as of business mobile
customers were interviewed which allowed to estimate possible benefits of MNP
13
implementation for different welfare groups of the consumers on the market. The
authors classified the benefits from MNP into 3 types. Type 1 benefits are the
benefits which accrue to subscribers who maintain their mobile numbers when
changing operator. Type 2 benefits – the benefits from increased competitive
pressure, such as efficiency improvement and price reduction. Type 3 benefits are –
those from avoiding of high misdialing rates, making changes to information stored in
customer equipment.
Other papers estimated switching costs, with either direct or indirect method, as
classified by Padilla et al., 2003.
Solid and comprehensive methodology-producing paper is Padilla et al. (2003) that
classifies different approaches to measure switching costs into two groups – direct
and indirect methods. Direct approach measures switching costs based on
consumer-level data and indirect approach, based on enterpriselevel or aggregated
data. Direct method is based on random utility framework and indirect method is
based on either elasticity or on prices/profit margins framework.
Among papers that employ direct method to estimate switching costs is Kim (2005),
that measured the effect of MNP on consumer switching costs. The econometric
method used is mixed logit. He found that number portability reduced switching costs
on average by 35%.
Grzybowski (2005) uses consumer-level data for 1999-2001 and is able to measure
switching costs in random utility framework via mixed logit econometric model
specification, based on methodology developed Padilla et al (2003). The empirical
investigation resulted in finding no significant switching costs for UK leading to
conclusion that now switching costs ceased to be an issue for regulators in the UK
mobile industry.
Another methodology-producing paper concerning approaches to measure switching
costs is Shy (2002). Striving to meet the need for estimating switching costs under
data availability constraint the method was developed that allows estimating
switching costs given data on process and market shares only. But several strong
14
assumptions are to be fulfilled – first, there are only two firms in the market and,
second, duopolists do not under-price each other.
Though number of empirical papers grows quickly still there is enormous space for
investigation. Up to my knowledge no research was done on measuring the effect
that MNP has on future evolution of market shares. And no empirical research was
conducted so far on how MNP changes the effect of other factors that affect
evolution of market shares of competitors. So, there is some space for novelty and
this thesis is aiming at this.
2.3 SOME OF THE STUDIES RELATED TO MNP
Sr.
No.
Title Author Learning’s
1 Implementation of
Mobile Number
Portability in CEPT
countries
Electronic
Communications
Committee (ECC report
updated October 2005,
original: March 2003)
Awareness of the predominant
approaches to MNP
implementation and to compare
alternative approaches.
2 Mobile Number
Portability
Ewan Sutherland
(2006)
- Churn is good to an extent.
- How MNP benefits business
customers
3 Mobile Number
Portability
Stefan Buehler,
Justus Haucap
(July, 2004)
-For success of MNP,
termination charges have to be
regulated.
- The set-up costs for MNP must
not be so high that they exceed
the various consumer benefits.
4 Mobile Number
Portability More
Banerjee (2009)
Reliance, Tata, and BSNL
subscribers more likely to
15
Attractive To India's
Postpaid Users and
High Spenders:
switch.
5 MNP Effect: Not
enough of a game
changer!
Adesh Doifode (8th
December, 2010)
Indian Telecom market
comprises of ~ more than 91%
prepaid subscribers and already
this segment is having annual
churn rate from 50-70%. Hence,
there will not be any big move in
this segment. Though, the post-
paid segment which is ~9% or
less of total subscriber base in
India and contributes about 20%
of overall subscriber revenue
would be expected to have
higher churning rate as
compared to present rate of 12-
24%.
6 Mobile Number
Portability
Rohan Samarajiva (2010)
- Multiple SIM ownership
among those at Pakistan Bottom
of Pyramid (BPO) increased
from 13% to 23% from 2006 to
2008, countries we studied) from
2006 to 2008, despite MNP
being introduced.
-BOP users placed great weight
on affinity- group calling plans.
- They were very comfortable
with changing SIMs to take
advantage of coverage and price
SIMs to take advantage of
coverage and price
16
differentials
- They were unlikely to use
MNP
- Also the normal rationales re
business cards, letterhead, etc.
do not apply
7 An Empirical
Analysis of
Consumer Switching
Behavior towards
Mobile Number
Portability
Kavita Saxena (May 2011) - Procedure of MNP is difficult
to follow by many customers.
-firms should concentrate more
on the influencing aspects (ISD
call rate, free local SMS, booster
packs and call cutter cards) in
customer point of view in order
to utilize the services more.
- Poor coverage and lack of
promotion and offers was the
main reason for implementing
MNP.
Table 2.1 Some of the studies related to MNP
17
CHAPTER 3
INTRODUCTION TO TELECOM INDUSTRY
18
3.1 HISTORY
Telecom in the real sense means the transfer of information between two distant
points in space. The popular meaning of telecom always involves electrical
signals and as a result, people often exclude postal or any other
raw telecommunication methods from its meaning. Therefore, the history of Indian
telecom can be started with the introduction of telegraph.
3.2 INTRODUCTION
The Indian postal and telecom sectors saw a slow and uneasy start. In 1850, the first
experimental electric telegraph line was started between Kolkata and Diamond
Harbour. In 1851, it was opened for the use of the British East India Company. The
Posts and Telegraphs department occupied a small corner of the Public Works
Department at that time.
Subsequently, the construction of 4,000 miles (6,400 km) of telegraph lines
connecting Kolkata (then Calcutta) and Peshawar in the north along
with Agra, Mumbai (then Bombay) through Sindwa Ghats, and Chennai (then
Madras) in the south, as well as Ootacamund and Bangalore was started in
November 1853. Dr.William O'Shaughnessy, who pioneered
the telegraph and telephone in India, belonged to the Public Works Department, and
worked towards the development of telecom throughout this period. A separate
department was opened in 1854 when telegraph facilities were opened to the public.
In 1880, two telephone companies namely The Oriental Telephone Company Ltd.
and The Anglo-Indian Telephone Company Ltd. approached the Government of
India to establish telephone exchanges in India. The permission was refused on the
grounds that the establishment of telephones was a Government monopoly and that
the Government itself would undertake the work.
On the 28th January 1882, Major E. Baring, Member of the Governor General of
India's Council declared open the Telephone Exchanges in Calcutta, Bombay and
Madras. The exchange in Calcutta named the "Central Exchange", was opened at
third floor of the building at 7, Council House Street, with a total of 93 subscribers.
Later that year, Bombay also witnessed the opening of a telephone exchange.
19
Indian telecom sector is more than 165 years old. Telecommunications was first
introduced in India in 1851 when the first operational land lines were laid by the
government near Kolkata (then Calcutta), although telephone services were
formally introduced in India much later in 1881. Further, in 1883, telephone services
were merged with the postal system. In 1947, after India attained independence, all
foreign telecommunication companies were nationalised to form the Posts,
Telephone and Telegraph (PTT), a body that was governed by the Ministry of
Communication.
The Indian telecom sector was entirely under government ownership until 1984,
when the private sector was allowed in telecommunication equipment
manufacturing only. The government concretised its earlier efforts towards
developing R&D in the sector by setting up an autonomous body – Centre for
Development of Telematics (C-DOT) in 1984 to develop state-of-the-art
telecommunication technology to meet the growing needs of the Indian
telecommunication network. The actual evolution of the industry started after the
Government separated the Department of Post and Telegraph in 1985 by setting up
the Department of Posts and the Department of Telecommunications (DoT).
The entire evolution of the telecom industry can be classified into three distinct
phases.
Phase I- Pre-Libralisation Era (1980-89)
Phase II- Post Libralisation Era (1990-99)
Phase III- Post 2000
Until the late 90s the Government of India held a monopoly on all types of
communications – as a result of the Telegraph Act of 1885. As mentioned earlier in
the chapter, until the industry was liberalised in the early nineties, it was a heavily
government-controlled and small-sized market, Government policies have played a
key role in shaping the structure and size of the Telecom industry in India. As a
result, the Indian telecom market is one of the most liberalised market in the world
with private participation in almost all of its segments. The New Telecom Policy
(NTP-99) provided the much needed impetus to the growth of this industry and set
the trend for libralisation in the industry.
20
3.3 EMERGENCE AS A MAJOR PLAYER
In 1975, the Department of Telecom (DoT) was separated from Indian Post &
Telecommunication Accounts and Finance Service. DoT was responsible for telecom
services in entire country until 1985 when Mahanagar Telephone Nigam Limited
(MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. In
1990s the telecom sector was opened up by the Government for private investment
as a part of Liberalisation-Privatization-Globalization policy. Therefore, it became
necessary to separate the Government's policy wing from its operations wing. The
Government of India corporatized the operations wing of DoT on 1 October 2000 and
named it as Bharat Sanchar Nigam Limited (BSNL). Many private operators, such
as,
Reliance Communications
Tata Indicom
Vodafone
Loop Mobile
Airtel
Idea
Docomo
Uninor
Aircel successfully entered the high potential Indian telecom market.
The telecom sector in India experienced a rapid growth over the past decade on
account of regulatory libralisation, structural reforms and competition, making
telecom one of the major catalysts in India‟s growth story. However, much of this
growth can be attributed to the unprecedented growth in mobile telephony as the
number of mobile subscribers grew at an astounding rate from 10 million in 2002 to
392 million in 2009. Besides, the growth in the service and IT and ITeS sector also
increased the prominence of the telecom industry in India. Telecom has emerged as
21
a key infrastructure for economic and consumer growth because of its multiplier
effect and the fact that it is beneficial to trade in other industries. The contribution of
the sector to GDP has been increasing gradually (its contribution in GDP has more
than doubled to 2.83% in FY07 from 1.0% in FY92).
Telecom is one of the fastest-growing industries in India; on an average the industry
added 8 million wireless subscribers every month in FY08. The government had set
a target of 500 million telecom connections by 2010. However, according to the
TRAI, the total subscriber base (wireless and wireline) in the industry crossed the
500-mn-mark and reached 509.03 mn by the end of September 2009, which took
India to the second position in terms of wireless network in the world next only to
China. Prior to liberalisation, the telecom sector was monopolised by the public
sector and recorded marginal growth; in fact, during 1948-1998, the incremental
teledensity in the country was just 1.92%.
However, the introduction of NTP‟99 accelerated the growth of the sector and the
teledensity increased from 2.33 in 1999 to 36.98 in 2009; however, much of this
growth was brought about by the NTP-99 policy changes such as migration from
fixed license fee to revenue sharing regime and cost-oriented telecom tariffs. From
2003 onwards the government has taken certain initiatives such as unified access
licensing regime, reduced access deficit, introduction of calling party pays (CPP)
and revenue sharing regime in ADC that has provided further impetus to the sector.
The Indian telecom industry is characterised with intense competition, and
continuous price wars. Currently, there are around a dozen telecom service
providers who operate in the wired and wireless segment. The government has
been periodically implementing suitable fiscal and promotional policies to boost
domestic demand and to create volumes for the industry.
The Indian telecom industry has immense growth potential as the teledensity in the
country is just 36 as compared with 60 in the US, 102 in the UK and 58 in Canada.
The wireless segment growth has played a dominant role in taking the teledensity to
the current levels. In the next few years, the industry is poised to grow further; in
fact, it has already entered a consolidation phase as foreign players are struggling to
acquire a pie in this dynamic industry.
22
3.3.1 Telephones
The primary regulator of telecommunications in India is the Telecom Regulatory
Authority of India (TRAI). It closely regulates all of the industries mentioned below
with the exception of newspapers and the Internet service provider industry. The
telecommunications industry in India is dominated by private-sector and two state-
run businesses.
Most companies were formed by a recent revolution and restructuring launched
within a decade, directed by Ministry of Communications and IT, Department of
Telecommunications and Minister of Finance. Since then, most companies
gained 2G, 3G and 4G licenses and engaged fixed-line, mobile and internet
business in India. On landlines, intra-circle calls are considered local calls while
inter-circle are considered long distance calls. Foreign Direct Investment policy has
increased the foreign ownership cap from 49% to 74%. Currently Government is
working to integrate the whole country in one telecom circle.
For long distance calls, the area code prefixed with a zero is dialled first which is
then followed by the number (i.e. To call Delhi, 011 would be dialled first followed by
the phone number). For international calls, "00" must be dialled first followed by
the country code, area code and local phone number. The country code for India is
91. Several international fibre-optic links include those to Japan, South Korea, Hong
Kong, Russia, and Germany. Some major telecom operators in India include Airtel,
Vodafone, Idea, Aircel, BSNL, MTNL, Reliance Communications, TATA
Teleservices, Infotel, MTS, Uninor, TATA DoCoMo, Videocon, Augere, Tikona
Digital.
Telephone Subscribers (Wireless and Landline): 914.59 million (October 2012)
Land Lines: 33.19 million (October 2012)
Cell phones: 881.40 million (October 2012)
Monthly Cell phone Addition: 7.79 million (October 2012)
Teledensity: 76.03 % (October 2012)
Projected Teledensity: 1 billion, 84% of population by 2013 End
23
3.3.2 Mobile Telephones
With a subscriber base of more than 851 million, the Mobile telecommunications
system in India is the second largest in the world and it was thrown open to private
players in the 1990s. GSM was comfortably maintaining its position as the dominant
mobile technology with 80% of the mobile subscriber market, but CDMA seemed to
have stabilised its market share at 20% for the time being. By March 2010 the
country had 584 million mobile subscribers, up from 350 million just 15 months
earlier. The mobile market was continuing to expand at an annual rate in excess of
40% coming into 2010.
The country is divided into multiple zones, called circles (roughly along state
boundaries). Government and several private players run local and long distance
telephone services. Competition has caused prices to drop and calls across India are
one of the cheapest in the world. The rates are supposed to go down further with
new measures to be taken by the Information Ministry. In September 2004, the
number of mobile phone connections crossed the number of fixed-line connections
and presently dwarfs the wireline segment by a ratio of around 20:1.
The mobile subscriber base has grown by a factor of over a hundred and thirty, from
5 million subscribers in 2001 to over 881 million subscribers as of October 2011.
India primarily follows the GSM mobile system, in the 900 MHz band. Recent
operators also operate in the 1800 MHz band. The dominant players are Airtel,
Reliance Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There are many
smaller players, with operations in only a few states. International roaming
agreements exist between most operators and many foreign carriers. The
government allowed Mobile number portability (MNP) which enables mobile
telephone users to retain their mobile telephone numbers when changing from one
mobile network operator to another. India is divided into 22 telecom circles.
3.3.3 Fixed Telephones
Until the New Telecom Policy was announced in 1999, only the Government-owned
BSNL and MTNL were allowed to provide land-line phone services through copper
wire in India with MTNL operating in Delhi and Mumbai and BSNL servicing all other
24
areas of the country. Due to the rapid growth of the cellular phone industry in India,
landlines are facing stiff competition from cellular operators. This has forced land-line
service providers to become more efficient and improve their quality of service.
Land-line connections are now also available on demand, even in high density urban
areas. India has over 35 million main line customers.
3.3.4 Internet
Internet country code: .in
Internet Service Providers (ISPs): 180 (2010)
Internet hosts: 4,536,000
Internet users: 121 million
Broadband Internet users: 13 million (October 2011)
Internet access in India is largely provided by the private sector and two state-run
companies and is available in a variety of forms, using a variety of technologies, at a
wide range of speeds and costs. The country has the world's fourth largest
Internet users with over 121 million users (of whom 59% who only access the
internet via mobile devices) as of December 2011.However, the Internet penetration
in India is one of the lowest in the world and only accounts for 8.4% of the population
compared to OECD (Organisation for Economic Co-operation and Development )
counties where average penetration rate is over 50%.The number of broadband
Internet subscribers in India has started to become more significant, having more
than doubled in the two-year period to end-2009. DSL (Digital subscriber line), whilst
holding slightly more than 75% of the local broadband market, was steadily losing
market share to other non-DSL broadband platforms, especially to wireless
broadband platforms
The growth in number of broadband connections in India has accelerated since
2006. As of October 2011, total broadband Internet connections in India had reached
13 million constituting 1.0% of the population. India has one of the lowest
penetrations of broadband connectivity in the world.
A number of private Internet Service Providers (ISPs) offer services in India, many
with their own local loop and gateway infrastructures. BSNL and MTNL have
25
continued to dominate the ISP market because of their existing massive copper
infrastructure in the last-mile across the nation. An estimated 60% of Internet users
were still regularly accessing the Internet via the country's more than 10,000
cybercafés.
According to International Telecommunication Union, the international average
broadband speed is at 5.6 Mbps, whereas in India the average speed is at 256 kbps
which is the minimum speed set by TRAI. The government declared 2007 to be "the
year of broadband." Four years later, Indian broadband failed to deliver download
speeds of which other developed nations delivers. South Korea led the list with an
average of 43 Mbit/s, followed by Japan (10.6 Mbit/s) and United States (4.6 Mbit/s).
3.4 FOREIGN DIRECT INVESTMENT (FDI)
In Basic, Cellular Mobile, Paging and Value Added Service, and Global Mobile
Personal Communications by Satellite, Composite FDI permitted is 74% (49% under
automatic route) subject to grant of license from Department of Telecommunications
subject to security and license conditions. (para 5.38.1 to 5.38.4 of consolidate FDI
Policy circular 1/2010 of DIPP)
FDI up to 74% (49% under automatic route) is also permitted for the following: -
Radio Paging Service
Internet Service Providers (ISP's)
FDI up to 100% permitted in respect of the following telecom services: -
Infrastructure Providers providing dark fibre (IP Category I)
Electronic Mail
Voice Mail
26
CHAPTER 4
INTRODUCTION TO MOBILE NUMBER PORTABILITY IN INDIA
27
4.1 WHAT IS MNP?
Mobile number portability (MNP) enables mobile telephone users to retain their
mobile telephone numbers when changing from one mobile network operator to
another.
Number Portability will allow subscribers to change their service provider while
retaining their old mobile number. Portability benefits subscribers and increases the
level of competition between service providers, rewarding service providers with the
best customer service, network coverage, and service quality.
In short, Switch mobile phone providers and keep your existing mobile phone
number using mobile number portability – MNP.
4.2 HISTORY
Though it was introduced as a tool to promote competition in the heavily
monopolized wire line telecommunications industry, number portability became
popular with the advent of mobile telephones, since in most countries different
mobile operators are provided with different area codes and, without portability,
changing one's operator would require changing one's number. Some operators,
especially incumbent operators with large existing subscriber bases, have argued
against portability on the grounds that providing this service incurs considerable
overhead, while others argue that it prevents vendor lock-in and allows them to
compete fairly on price and service. Due to this conflict of interest, number portability
is usually mandated for all operators by telecommunications regulatory authorities.
28
Figure 4.1 Country-wise Introduction of MNP
Singapore mobile subscribers were one of the first in the world to enjoy mobile
number portability through this Call-Forwarding solution when it was launched
there in 1997. Hong Kong, the UK, and Holland followed in 1999 and now over 54
countries around the world have implemented mobile number portability So world‟s
first country to introduce MNP was Singapore in 1997, followed by the UK, Hong
Kong and the Netherlands in 1999. As of 2003, other countries especially in Europe,
require MNP.
Our Study majorly focuses on to know whether the consumers want to change their
current mobile service provider when they are permitted to retain the current mobile
phone number that they had.
This study covers following service providers:
1. Airtel
2. Vodafone
3. Reliance
4. TATA DOCOMO
5. Idea
6. Others
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4.3 LIFE BEFORE MNP
Today mobile consumers find it hard to move from one network operator to another
with a better plan, unless they are ready to forego their old mobile number and
update all their contacts with the new number. The result is consumers often stick to
one operator even if they are dissatisfied with plans or customer service. Now, with
the launch of MNP, consumers can easily switch between operators offering different
plans while retaining their old number. A recent survey by Aegis Consulting and
Research shows that Indians have been waiting for this feature and have much to
gain with the launch of MNP.
4.4 INTRODUCTION IN INDIA
In 2010 MNP was arrived to few cities of the India, like "Haryana" but to security
reasons government had not given the authority to launch it all over the India. After
one year of consideration finally Indian Government has given the green signal to
"mobile number portability" service.
Arrival of Mobile Number Portability may affect the business of various service
providers. The service operators who are offering poor quality service to their
customers may get affected by their rivals, who are providing much better service.
So, the arrival of this service has changed the way of competition and now every
service providers has challenge to provide better and uninterrupted service to satisfy
their customers otherwise they got switched.
4.5 SALIENT FEATURES OF THE MNP
MNP facility shall be available only within a given licensed service area.
A subscriber holding a mobile number is eligible to make a porting request
only after 90 days of the date of activation of his mobile connection. If a
number is already ported once, the number can again be ported only after 90
days from the date of the previous porting.
30
The subscriber who wishes to port his mobile number should approach the
Recipient operator (the operator to whom the subscriber wants to port his
number). The Subscriber may be required to pay porting charges, if any, to
the Recipient Operator.
The subscriber making the porting request is required to have cleared all the
bills issued prior to the date of porting request. He shall give an undertaking
that he has already paid all billed dues to the Donor Operator as on the date
of the request for porting and that he shall pay dues to the Donor Operator
pertaining to the mobile number till its eventual porting and that he
understands and agrees that in event of non-payment of any such dues to the
Donor Operator, the ported mobile number shall be liable to be disconnected
by the Recipient Operator.
A subscriber may withdraw his porting request within 24 hours of its
submission to the Recipient Operator. However, the porting charges shall not
be refundable.
The regulation envisage a maximum time period of 4 days for the completion
of porting process in all licensed service areas except in the case of J&K,
Assam and North East licensed service areas where the maximum time
allowed is 12 days. However, efforts will be made to further reduce the porting
period.
Access Providers are required to implement All Call Query method.
The Originating operator shall be responsible to route the call to correct
terminating network.
According to the TRAI the introduction of MNP in India will helps in increasing
competition between the service providers and acts as a catalyst for the
service providers to improve their quality of service.
31
Through these MNP regulations, the TRAI is laying down the basic business
process framework for implementation of MNP in the country.
4.6 TECHNICAL DETAILS
A significant technical aspect of MNP (Mobile Number Portability) is related to the
routing of calls or mobile messages (SMS, MMS) to a number once it has been
ported. There are various flavours of call routing implementation across the globe but
the international and European best practice is via the use of a central database
(CDB) of ported numbers. Network operator makes copies of CDB and queries it to
find out which network to send a call to. This is also known as All Call Query (ACQ)
and is highly efficient and scalable. Majority of the established and upcoming MNP
systems across the world are based on this ACQ/CDB method of call routing.
One of the very few countries to not use ACQ/CDB is the UK where calls to a
number once it has been ported are still routed via the Donor network. This is also
known as 'Indirect Routing' and is highly inefficient as it is wasteful of transmission
and switching capacity. Because of its Donor dependent nature, Indirect Routing
also means that if the Donor network develops a fault or goes out of business, the
customers who have ported out of that network will lose incoming calls to their
numbers. The UK telecoms regulator Of co completed its extended review of the UK
MNP process on 29 November 2007 and mandated that ACQ/CDB be implemented
for mobile to mobile ported calls by no later than 1 September 2009.
Prior to March 2008 it took a minimum of 5 working days to port a number in the UK
compared to 2 hours only in USA, as low as 20 minutes in the Republic of Ireland, 3
minutes in Australia and even a matter of seconds in New Zealand. On 17 July
2007, Ofcom released its conclusions from the review of UK MNP and mandated
reduction of porting time to 2 working days with effect from 1 April 2008. On 29
November 2007, Ofcom completed its consultation on further reduction to porting
time to 2 hours along with recipient led porting and mandated that near-instant (no
more than 2 hours) recipient led porting be implemented by no later than 1
September 2009.
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4.7 IMPACT ON SERVICE PROVIDERS
The launch of MNP in India is expected to have an impact on operator‟s margins as
they will try to retain the subscribers by offering competitive tariffs and improving
QoS. The Indian telecom players already grappled with falling Average Revenue Per
User (ARPUs) and offering competitive tariffs to match the competition will further
put pressure on their margins. Moreover, now with MNP in place the QoS will be a
major differentiator which will attract subscribers. In such a scenario, operators will
now have to seriously think about their service offerings and make substantial
investments to improve QoS which will put pressure on margins for a short term
period. In summary, MNP will increase the churn rate that will lead to greater
customer acquisition and retention costs and also put pressures on an operator‟s
margin.
Another trend that is expected is that there would be a lot of traction on the corporate
connections. On an individual subscriber level, India already experiences a high
churn rate as around 96% of subscribers are in the pre-paid category that keep
changing operators depending on the tariff structures. However, the corporate
segment is a top end of the overall pricing range with a heavy usage of voice and
data services and contributes substantially to the ARPU. Competitors are expected
to target this segment with lucrative plans and thus incentivise bulk of corporate
subscribers both under individual plans as well as corporate plans to shift. This will
further impact the service provider‟s margins.
Positives:
1. Operators who are having existing pool of strong customer base will be able to
retain customer by providing competitive services.
2. New telecom service providers can survive in the market by providing competitive
tariffs and VAS.
3. ARPU is likely to improve as customers reduce number of active connection of
several operators.
33
Negatives:
1. Competition among telecom service providers is increasing.
2. Profit margins are likely to erode
3. Complex task to find out subscribers owns by operators as it can change service
providers when ones found better value for money
4. Cartel in the existing operators to form synergy lead to hard game for rest of the
players.
4.8 IMPACT ON SERVICE PROVIDERS
Positives:
1. Subscribers would likely to have efficient services at cheapest rate.
2. Can retain one number lifetime while choosing competitive plans from other
operators.
3. CDMA users can switch to GSM network providers without changing the handset,
and hence subscribers need not to purchase the different handset for the different
network.
Negatives:
1. Fees for transfer is yet not decided as new services introduced it will cost high.
2. A subscriber is eligible to make a porting request only after 90 days of the date of
activation of his mobile connection.
3. Subscribers transferring the mobile number with some balance amount, no credit
transfer would be allowed to the new account.
4. Consumers allowed to change operators within their registered cir-cle only (So if
you are moving to another city and want to retain your mobile number, MNP is not
the answer).
34
4.9 TYPES OF MNP
There are basically three types of number portability.
The government has defined and mandated three basic types of number portability:
service provider portability (commonly referred to as Local Number Portability),
location portability, and service portability. The three types may be combined to form
variations on number portability services.
Service provider portability.
Location portability.
Service portability.
Service provider portability:
This is ability to a subscriber to retain within the same service area, an existing
telephone number even if they change from one service provider to another. This
type of portability is for the same service, i.e fixed to fixed, mobile to mobile.
Different types of operator portability define as:
Fixed number portability: Portability of fixed geographic numbers.
Mobile Number Portability: Portability of mobile telephone numbers.
Intelligent number Portability: Portability of non-geographic numbers.
Location portability:
Location portability released on July 2, 1996, is the ability of users of
telecommunications services to retain existing phone numbers when changing from
one physical location to another. Location portability is a portability of geographic
number from one location to another. Location portability can be within area, within
numbering area, within charging area or anywhere.
Service portability:
Service portability is the ability of users of telecommunications services to retain
existing telephone numbers when changing from one service to another service, say
35
from fixed to mobile service. Till date operator portability has been implemented
internationally and this is going to be implemented in India as well.
Number portability can also been split into fixed number portability (FNP) and Mobile
number portability (MNP). Fixed number portability allow users to switch their land
line service provider without having to surrender their number while mobile number
portability provide the same service to mobile counterpart. India is implementing
MNP initially.
4.10 MOBILE NUMBER PORTABILITY PROCESS
Contact the new mobile Service Provider to whom you want to port your
mobile number.
Read the eligibility and other conditions carefully. Please visit www.trai.gov.in
for further details.
Obtain Customer acquisition From (CAF) & Porting Form.
If eligible, Obtain „Unique Porting Code„ by sending an SMS from the mobile
number you want to port to the number „1900‟ with text „PORT‟ followed by
space followed by your 10 digit mobile number you want to port.
After performing the first step you will receive a unique porting number which
will help you to port your number. This UPC will have Name of operator,
Telecom Circle, Six digit numbers. So it will be an alpha-numeric number.
Fill up the CAF and Porting Form.
Submit the duly filled Porting Form and CAF along with requisite
documentary proof of the mobile service provider.
If you are a post-paid subscriber, submit a paid copy of the last bill issued
along with the Porting Form and CAF.
Obtain new SIM card from the new service provider.
Subscriber can withdraw the porting request within 24 hrs of applying.
36
4.11 DRAWBACKS
MNP facility is available only in given licensed service area. So if you are moving to
another city MNP number will not be continued, whereas if you have the same
connection number t can be retained on moving out of city. But soon that is by
January 20th 2011 as per TRAI announcement MNP will be launched all over India.
Customer once he shifted from one connection to another and applied for MNP, he
has a locking perod for 90 days. Next connection he can change only after 90 days.
So a consumer who is dissatisfied with an operator service in the first month itself is
being forced to suffer for another two months.
It is a complex task for telecom operators. It is an additional burden to the telecom
sector. Duration between the 'break' that is disconnection of the existing telecom
operator and 'make' that is new connection takes at least 2 hours. So consumer is in
lack of both the connection for a period of two hours.
4.12 ELIGIBILITY AND CONDITIONS FOR PORTING A MOBILE NUMBER
Subscriber is allowed to move to another mobile service provider only after
90 days of the date of the activation of that mobile connection or from the
date of porting of the mobile number, whichever is applicable.
Subscriber is allowed to change mobile service provider within the same
service area only.
If you are a Post-paid subscribers, please ensure that you have paid all the
dues as per your last bill (subscriber will have to sign an undertaking in the
Porting Form also).
If you are Pre-paid subscriber, please note that the balance amount of talk
time, if any, at the time of porting will lapse.
37
4.13 MNP IN INDIA PROS AND CONS
Pros:
The Mobile Number Portability (MNP) allows you to retain your existing or old
mobile phone number despite switching over to yet another service operator.
You enjoy the advantage of retaining your old mobile phone number without
unduly worrying about the burden of using or memorizing a new number.
Despite switching over to yet another service operator, there is no any
additional burden of informing it to your relatives and friends. If you are a
business man or a professional like a doctor or lawyer, your customers or
clients can contact you with the same old mobile phone number. Hence,
despite switching over to a new service provider, you retain your customers or
clients intact.
You enjoy the benefits of better service from the new operator by retaining the
same old mobile phone number wherever you go or reside. Again, each
service provider offers some special services that cater to the needs of its
bulk customers. You have the added advantage of availing such special
services from a new operator by retaining your old mobile phone number
using MNP facility.
MNP plays a significant role in reducing the fierce competition that prevails
between the various service providers. In fact each service provider offers
various schemes of tariff and facilities to retain their existing customers and to
woo the customers from other service providers. But, by availing the facility of
Mobile Number Portability, many subscribers voluntarily switch over from one
service provider to another. Thus it eases the burden of better service
providers from wooing many subscribers to their mobile phone service. In the
result, each service provider will be heavily burdened with the task of
providing a better mobile phone service than the other service providers. In
other words each service provider will mainly focus his attention in providing
the best service to his existing customers and retain them.
38
The facility of Mobile Number Portability is a boon to the countries like India
and China, where the mobile phone users are in millions and their density is
very high.
However, there are some disadvantages in availing the MNP facility.
Cons:
By switching over to a new service provider, a mobile phone subscriber loses
the special services and facilities offered by the previous or old service
provider once and for all.
Despite retaining the same old mobile phone number through MNP facility, it
takes time to acclimatize to the operating system and features of the new
service provider.
In order to avail the MNP facility, you have to keep in touch with two service
providers, the old and the new. It involves a number of technical feasibilities
as well clerical formalities.
By availing the MNP facility, your mobile phone number loses it specific
identity associated with a particular operator. Now it is not possible to predict
exactly from where a subscriber avails his mobile phone service.
Since MNP is an advanced technical facility, it is offered at a comparatively
high cost. Hence, a common man may have to pay more for it.
4.14 TERMINOLOGIES
Before getting deep inside the process involved in the mobile number portability let
us have a brief idea about the following terminologies, which are very often used in
this context.
39
i. Porting means the process of moving mobile number from one Service Provider
to another Service Provider or from one mobile technology to another of the same or
any other Service Provider.
ii. Donor Operator means the Service provider, to whose network the mobile
number belongs at the time the subscriber makes a request for porting.
iii. Recipient Operator means the Service Provider who will be providing mobile
telecommunication service to the subscriber after porting.
iv. Number Portability Database means the database maintained by each Mobile
Number Portability Service provider in electronic form, holding the details of all
ported mobile numbers in its zone, along with the complete history of all transactions
related to the porting of such numbers.
v. Per Port Transaction charge means the charge payable by the Recipient
Operator to the Mobile Number Portability Service provider for processing the porting
request in respect of a mobile number.
vi. Porting charge means such charge as may be levied by a Recipient Operator
from a subscriber for porting his mobile number.
vii. Local Number Portability Database means the database of all ported mobile
numbers maintained by individual Service Provider. For BSNL, the SSTPs will serve
this purpose.
viii. Location Routing Number means the code assigned to every Service Provider
for the purpose of implementing Mobile Number Portability. These are 4 digit codes
and have been assigned by DOT. They have been assigned LSA wise, Operator
wise and technology wise. BSNL has been allocated 42 codes in total – 21 for GSM
and 21 for CDMA.
40
ix. Dipping means use of query response system of the Mobile Number Portability
service provider for obtaining Location Routing Number for routing a message to the
called number.
x. Unique porting code means an alphanumeric code allocated, upon request, by a
donor operator to its subscriber for the purpose of facilitation of porting of his mobile
number;
xi. MCHA means Mobile Number Portability clearing house administrator, which is
the agency responsible for maintaining the MNP database and also known as MNP
service provider.
4.15 SERVICE PROVIDER‟S ADVERTISING STRATEGIES USING MNP
Without MNP, operators were mainly able to target a limited audience who were
getting a new number. Migration opportunity was smaller and ROI harder to achieve
using any advertising approach including mobile advertising. With the launch of
MNP, the entire population of mobile users are now open to every operator; hence
demand for better advertising and marketing is a reality under MNP.
It is evident that operators with better choices and offers will benefit from this new
reality. However; MNP also presents another unique challenge to mobile service
operators in India. It presents a first ever opportunity for consumers to churn en
masse. It is interesting to see the variety of marketing approaches from operators in
response. For example:
Idea Cellular Ltd. ran an aggressive television campaign asking people to
“Get Idea”. The concept behind this was to call out the differentiators that
Idea was offering. Better network coverage, plans adaptable to consumer
usage; echo deletion etc. were widely advertised.
Vodafone India took a more inclusive approach by „welcoming everybody‟.
With the „Everybody‟s welcome‟ tagline, Vodafone has taken a more
confident, leadership approach relying on a friendly, likeable tone to the
41
advertising. Rather than call out the product benefits of using Vodafone, the
Vodafone ads use elements that are eminently likable such as the children,
the pug, and catchy music.
Tata DoCoMo went with an aggressive mobile Twitter campaign and also
initiated a hashtag campaign named switch2TataDoCoMo, which it inserted
into all its tweets on MNP. A typical tweet by the company read, “If ur looking
to switch then ensure its to a 3G ready network, who believes in cool
offers..aka us Switch2TataDoCoMo MNP”. The firm also adopted an informal
tone in its replies to individual tweeters, often referring to them as “buddy” or
“pal”.
The MNP wars were not restricted just to Twitter and TV ads. Tata DoCoMo,
Idea and Airtel have all bought advertising space on Google that appears on
the result pages on searches for either MNP or mobile number portability.
Campaigns that promote operators and adoption via MNP live in the mobile realm;
hence it is a must for mobile to be an integral marketing channel. Advertising on the
mobile provides the highest form of relevance to the user. Second, it also provides
the user a real understanding of requirements and tangible, personal understanding
of what makes one network more different than another. Overlook mobile advertising
and you pass by the most obvious and important channel for MNP messaging.
If the concepts above are not compelling enough, another benefit remains. The
greatest advantage that mobile offers operators in an MNP world are targeting
capabilities on competing operator networks and specific manufacturers and
handsets. With absolutely no spillage, advertisers can reach out to the exact
audience they want to reach with offers to pull them into their network. This sort of
targeting is not provided by any other sort of channel and is ideally suited to the
needs of operators in the MNP reality that is India today.
42
4.16 MNP Statistics
4.16.1 Circle wise Overall Teledensity
Circle wise Overall Teledensity December 2012
All India 73.34
Assam 46.50
Bihar 46.53
Madhya Pradesh 52.23
UP 56.20
J&K 58.41
Odisha 59.70
North East 66.53
Rajasthan 68.31
West Bengal 73.19
Haryana 76.72
Andhra Pradesh 76.88
Gujarat 85.19
Maharashtra 88.75
Karnataka 91.26
Kerala 100.76
Punjab 101.92
Himachal Pradesh 102.76
Tamil Nadu 109.64
Delhi 220.00
Table 4.1 Circle wise Teledensity
43
4.16.2 Zone wise MNP Requests December 2012 ( in Mn)
Zone 1
Service Area No of MNP requests
Delhi 2.64
Gujarat 6.93
Himachal Pradesh 0.31
Haryana 2.93
Jammu & Kashmir 0.01
Maharashtra 6.80
Mumbai 2.83
Punjab 2.62
Rajasthan 7.59
UP East 4.88
UP West 4.63
Total Zone 1 42.17
Table 4.2 Zone 1 MNP request
Zone 2
Service Area No of MNP requests
Andhra Pradesh 7.4
Assam 0.32
Bihar 1.58
Karnataka 9.89
Kerala 3.4
Kolkotta 1.48
Madhya Pradesh 4.75
North East 0.14
Odisha 1.82
Tamil Nadu 4.86
West Bengal 2.25
Total Zone 2 37.89
Total All India 80.06
Table 4.3 Zone 2 MNP request
44
4.16.3 Service Provider wise Wireless Market Share
Service Provider wise Wireless Market Share (CMS) December 2012
Bharti 21.03%
Vodafone 17.05%
Reliance 13.71%
Idea 13.18%
BSNL 11.56%
Tata 8.04%
Aircel 7.33%
Uninor 4.80%
Sistema 1.72%
MTNL 0.61%
Videocon 0.42%
Loop 0.35%
Quadrant (HFCL) 0.20%
Table 4.4 Service Provider wise Wireless Market Share
45
CHAPTER 5
DATA ANALYSIS AND INTERPRETATION
46
Q1. Do you use a mobile phone?
Answer No of Respondents
Yes 196
No 4
Table 5.1 Analysis - Do you use a mobile phone?
Figure 5.1 Analysis - Do you use a mobile phone?
Interpretation
In this case out of 200 respondents, 196 said Yes they have mobile phone
that is 98% and 4 respondent said No that is 2%.
From this we can say that mobile phone have reached to every house of our
country. This data also shows how big the mobile market is in INDIA.
196
4
Yes
No
47
Q2. Which mobile phone do you use?
Answer No of Respondents
Single SIM 156
Dual SIM 36
Triple SIM 3
Quadra SIM 1
Table 5.2 Analysis - Which mobile phone do you use?
Figure 5.2 Analysis - Which mobile phone do you use?
Interpretation
In this case out of 196 respondent 156 were using single SIM phone that is
79.59%, 36 were using Dual SIM phone that is 18.36, 3 were using Triple SIM
phone that is 1.5% and only one of them using Quadra SIM phone which is
5%.
Main purpose of respondent using more than one SIM is to avail the offer
given by different service provider.
0
20
40
60
80
100
120
140
160
180
Single SIM Dual SIM Triple SIM Quadra SIM
48
Q3. Are you aware of MOBILE NUMBER PORTABILITY (MNP)?
Answer No of Respondents
Yes 181
No 15
Table 5.3 Analysis - Are you aware of MOBILE NUMBER PORTABILITY (MNP)?
Figure 5.3 Analysis - Are you aware of MOBILE NUMBER PORTABILITY (MNP)?
Interpretation
Out of 196 respondent who were using mobile phone, 181 were aware about
MOBILE NUMBER PORTABILITY that is 92% and 15 respondent were not
aware about MOBILE NUMBER PORTABILITY that is 8%.
92%
8%
Yes No
49
Q4. Which service provider‟s services you are using currently? Since how long
you are using that service?
Service providers that the respondents are using currently
Answer No of Respondents
Vodafone 60
Airtel 45
Idea 30
Reliance 12
Others 34
Table 5.4 Analysis - Service providers that the respondents are using currently
Figure 5.4 Analysis - Service providers that the respondents are using currently
Interpretation
In this case out of 196 respondent 60 respondents were using Vodafone that
is 33%, 45 respondent were using Airtel service that is 23%, 30 respondent
were using Idea service that is 15.3%, 12 respondent were using reliance
service that is 6.12% and 34 respondent were using other services that is
Uninor Tata Docomo etc which is 17.34%.
From this data we can say that Vodafone is the strong leader in Ahmedabad
giving tough competition to the INDIA no one brand Airtel in GSM service.
0
10
20
30
40
50
60
Vodafone Airtel Idea Reliance Others
60
45
30
12
34
50
Time duration (years) for which respondents are using service of current
service provider
Years
1 2 3 4 5 6 >6
Vodafone 5 8 12 18 8 5 4
Airtel 6 8 9 12 5 3 2
Idea 5 3 10 7 3 1 1
Reliance 4 3 2 2 1 0 0
Others 10 8 7 5 3 1 0
Table 5.5 Analysis - Time duration (months) for which respondents are using service
of current service provider
Figure 5.5 Analysis - Time duration (months) for which respondents are using
service of current service provider
Interpretation
In this case number of respondent using Vodafone mobile service for more
than 4 year is 35. Respondent using Airtel Mobile service for more than 4 year
is 22. Respondent using Idea Mobile service for more than 4 year is 12.
Respondent using Reliance Mobile service for more than 4 year is 3.
Respondent using Other Mobile service for more than 4 year are 9.
0
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 >6
Vodafone
Airtel
Idea
Reliance
Others
51
Q5. Have you used MOBILE NUMBER PORTABILITY (MNP) service in past?
Answer No of Respondents
Yes 69
No 112
Table 5.6 Analysis - Have you used MOBILE NUMBER PORTABILITY (MNP)
service in past?
Figure 5.6 Analysis - Have you used MOBILE NUMBER PORTABILITY (MNP)
service in past?
Interpretation
In this case out of 196 respondent 69 have said that they have used MOBILE
NUMBER PORTABILITY that is 38% and 112 respondent have said they
have never used MOBILE NUMBER PORTABILITY that is 62%.
From the data of question no (3) it is clear that the 92 % of people are aware
of MOBILE NUMBER PORTABILITY but still only 38% have used it. It may
be due to several reasons.
69
112
Yes
No
52
Q6. To which service provider you switched from the older one using MNP?
Since how long you are using new provider‟s services?
To
Vodafone Airtel Idea Reliance Others
Vodafone 51 3 2 1 3
From Airtel 7 32 4 0 2
Idea 6 3 18 1 2
Reliance 5 3 1 3 0
Others 9 8 6 3 8
Table 5.7 Analysis - To which service provider you switched from the older one
using MNP
Figure 5.7 Analysis - To which service provider you switched from the older one
using MNP
Interpretation
In this case out of 60 customers who were currently using Vodafone, 51
preferred to remain with Vodafone. Out of 45 customers who were currently
using Airtel, 32 preferred to remain with Airtel. Out of 30 customers who were
currently using IDEA, 18 preferred to remain with IDEA. Out of 12 customers
who were currently using Reliance, 3 preferred to remain with Reliance. Out
of 34 customers who were currently using other services, 8 preferred to
remain with them.
0
1
2
3
4
5
6
7
8
9
Vodafone Airtel Idea Reliance Others
Vodafone
Airtel
Idea
Reliance
Others
53
Retention and Churn Rate of several service provider
Mobile Network
service provider
Retention rate Churn rate
Vodafone 85% 15%
Airtel 71% 29%
Idea 60% 40%
Reliance 33% 66%
Other 23% 77%
Table 5.8 Analysis - Retention and Churn Rate of several service providers
54
Q7. What are the benefits that you have got after switching to new service
provider?
Answer No of Respondents
SMS Offer 17
Free Internet Usage 7
Low Call Charges 35
Other 10
Table 5.9 Analysis - What are the benefits that you have got after switching to new
service provider?
Figure 5.8 Analysis - What are the benefits that you have got after switching to new
service provider?
Interpretation
In this case out 69 respondents who switched to new mobile service provider
17 respondents that are 24.6% have got SMS offer. 7 respondents which are
10% have got free internet offer. 35 respondents that are 49.27% have got
Low call charges. 10 respondents which are 14.6% have got other offer.
Clearly Network service provider uses low call charges as a tool to attract
customer.
SMS Offer Free InternetUsage
Low CallCharges
Other
17
7
35
10
No of Respondents
55
Q8. Select the most appropriate reason for not using MNP? (Select Anyone)
Answer No of Respondents
Satisfied with the current service provider 71
A processing fee of switching is high 5
Complicated process of switching 24
The processing time is longer 68
Other 13
Table 5.10 Analysis - Select the most appropriate reason for not using MNP
Figure 5.9 Analysis - Select the most appropriate reason for not using MNP
Interpretation
In this case Out of 181 respondent who were aware about MNP 71
respondent that is 40% have said they are satisfied with their current network
service provider that is why they have not used MNP.
About 5 respondents that is 2.7% have said processing fee of switching is
high that is why they have not used MNP. About 24 respondents that is
13.25% have said complicated process of switching because of which they
have not used MNP.
About 68 respondents that is 37.5 have said processing time is longer
because of which they have not used MNP. About 13 respondents said other
reason of not using MNP.
39%
3% 13%
38%
7% Satisfied with the currentservice provider
A processing fee of switching ishigh
Complicated process ofswitching
The processing time is longer
Other
56
Q9. Select your preferred mobile network service.
Answer No of Respondents
Vodafone 31
Airtel 22
Idea 16
BSNL 13
Reliance 10
Tata Docomo 8
Others 10
Table 5.11 Analysis - Select the most appropriate reason for not using MNP
Figure 5.10 Analysis - Select the most appropriate reason for not using MNP
Interpretation
In this case 69 respondents who have use MNP, 31 have preferred Vodafone
that is 44% of respondent. 22 have preferred Airtel that is 31.87% of
respondent. 16 have preferred Idea that is 23.1% of respondent.
10 have preferred reliance that is 14.4% of respondent, 31 have preferred
other which is 44% of respondent.
Vodafone is the desired choice by most of the respondent to switch.
0
10
20
30
40 31
22 16
13 10 8 10
57
Q10. Which factor do you give more priority for switching to new mobile
network service provider? (1= Most Preferred and 4= Least Preferred)
Rating
1 2 3 4
Economic Call charges 103 71 5 2
Network Quality 55 65 43 18
Customer Service 7 14 39 121
VAS 14 31 96 40
Table 5.12 Analysis – Factor for switching to new mobile network service provider
Figure 5.11 Analysis - Factor for switching to new mobile network service provider
Interpretation
Out of 181 respondents who were aware about MNP 51% of respondent
considered Economic call charges as the most important factor while
switching to other network. About 35% of respondent considered Network
quality as the most important factor while switching to other network.
About MNP 10% of respondent considered Customer service as the most
important factor while switching to other network. About MNP 4% of
respondent considered VAS as the most important factor while switching to
other network
103
71
5 2
55 65
43
18 7 14
39
121
14 31
96
40
1 2 3 4
Economic Call charges Network Quality Customer Service VAS
58
Q11. Rate your current mobile network service provider on different attributes.
Vodafone
Highly
Dissatisfied Dissatisfied Moderate Satisfied
Highly
Satisfied
Customer
Care 3 5 10 35
7
Network 2 3 7 10 38
Recharge
Availability 3 8 22 14 13
VAS 4 17 20 12 7
Table 5.13 Analysis – Rate your current mobile network service provider on different
attributes.
Figure 5.12 Analysis - Rate your current mobile network service provider on different
attributes.
Interpretation
In this case out of 60 respondents who were using Vodafone mobile network
service, network quality is the main reason why people are using it. Recharge
availability is the second reason why people preferred it.
Customer care is the third reason why people used Vodafone service and
VAS is the least preferred reason of using Vodafone service.
HighlyDissatisfied
Dissatisfied Moderate Satisfied Highly Satisfied
3 5 10
35
7 2 3
7 10
38
3 8
22
14 13
4
17 20
12 7
Customer Care Network Recharge Availability VAS
59
Airtel
Highly
Dissatisfied Dissatisfied Moderate Satisfied
Highly
Satisfied
Customer
Care 3 5 12 15
10
Network 3 4 9 15 14
Recharge
Availability 4 7 18 9 7
VAS 5 7 9 15 9
Table 5.14 Analysis – Rate your current mobile network service provider on different
attributes.
Figure 5.13 Analysis - Rate your current mobile network service provider on different
attributes.
Interpretation
In this case out of 45 respondents who were using Airtel mobile network
service network quality is the main reason why people using it. Customer care
is the second reason why people preferred it.
Recharge availability is the third reason why people use Airtel service and
VAS is the least preferred reason of using Airtel service.
HighlyDissatisfied
Dissatisfied Moderate Satisfied Highly Satisfied
3
5
12
15
10
3 4
9
15 14
4
7
18
9
7
5
7
9
15
9
Customer Care Network Recharge Availability VAS
60
Idea
Highly
Dissatisfied Dissatisfied Moderate Satisfied
Highly
Satisfied
Customer Care 5 8 6 7 4
Network 4 4 9 8 5
Recharge
Availability 5 5 10 6 4
VAS 2 5 6 11 6
Table 5.15 Analysis – Rate your current mobile network service provider on different
attributes.
Figure 5.14 Analysis - Rate your current mobile network service provider on different
attributes.
Interpretation
In this case out of 30 respondents who were using IDEA mobile network
service. VAS is the main reason why people using it. Network quality is the
second reason why people preferred it.
Customer care is the third reason why people use IDEA service and
Recharge availability is the least preferred reason of using IDEA service.
HighlyDissatisfied
Dissatisfied Moderate Satisfied Highly Satisfied
5
8
6 7
4 4 4
9 8
5 5 5
10
6
4
2
5 6
11
6
Customer Care Network Recharge Availability VAS
61
Reliance
Highly
Dissatisfied Dissatisfied Moderate Satisfied
Highly
Satisfied
Customer Care 1 3 5 2 1
Network 2 2 4 2 2
Recharge
Availability 2 4 3 2 1
VAS 2 3 2 3 2
Table 5.16 Analysis – Rate your current mobile network service provider on different
attributes.
Figure 5.15 Analysis - Rate your current mobile network service provider on different
attributes.
Interpretation
In this case out of 60 respondents who were using Reliance mobile network
service. VAS is the main reason why people using it. Network quality is the
second reason why people preferred it.
Customer care is the third reason why people use Reliance service and
Recharge availability is the least preferred reason of using Reliance service.
HighlyDissatisfied
Dissatisfied Moderate Satisfied Highly Satisfied
1
3
5
2
1
2 2
4
2 2 2
4
3
2
1
2
3
2
3
2
Customer Care Network Recharge Availability VAS
62
Others
Highly
Dissatisfied Dissatisfied Moderate Satisfied
Highly
Satisfied
Customer Care 7 8 14 3 2
Network 5 9 13 5 2
Recharge
Availability 4 9 15 3 3
VAS 8 10 12 3 1
Table 5.17 Analysis – Rate your current mobile network service provider on different
attributes.
Figure 5.16 Analysis - Rate your current mobile network service provider on different
attributes.
Interpretation
In this case out of 60 respondents who were using Vodafone mobile network
service network quality is the main reason why people using it. Recharge
availability is the second reason why people preferred it.
Customer care is the third reason why people use Vodafone service and VAS
is the least preferred reason of using Vodafone service.
HighlyDissatisfied
Dissatisfied Moderate Satisfied Highly Satisfied
7 8
14
3 2
5
9
13
5
2 4
9
15
3 3
8 10
12
3 1
Customer Care Network Recharge Availibility VAS
63
CHAPTER 6
HYPOTHESIS AND MARKOV ANALYSIS
64
6.1 HYPOTHESIS 1
Total No. of Customers = 200
Customers who are Aware about MNP = 181
Customers who are not Aware about MNP = 19
H0: Customers are less aware about mobile number portability.
H1: Customers are more aware about mobile number portability.
H0: p=0.5
H1: p>0.5
n
pq
ppZcal
Where,
No. of Customers who are aware about MNP
total no. of Customers
P
2
So,
200
)5.0)(5.0(
5.0905.0 calZ
Now considering the significance level is of 5%. So the tabulated value is
455.11calZ
65
96.1tabZ
So, our calculated value falls in the rejection area.
H0 is rejected.
So, Alternate hypothesis is accepted
So, More Customers are aware about MNP.
66
6.2 HYPOTHESIS 2
Total No. of Customers = 200
Customers who are Aware about MNP = 181
Customers who are switching their network due to economic call charges = 103
Customers who are not switching their network due to economic call charges = 78
H0: Customers are switching their network due to economic call charges
H1: Customers are not switching their network due to economic call charges
H0: p=0.5
H1: p>0.5
n
pq
ppZcal
Where,
Customers who are switching their network due to economic call charges
Customers who are Aware about MNP
P
So,
181
)5.0)(5.0(
5.057.0 calZ
8835.1calZ
67
Now considering the significance level is of 5%. So the tabulated value is
96.1tabZ
So, our calculated value falls in the acceptance area.
H0 is accepted.
So, Alternate hypothesis is rejected
So, Customers are switching their network due to economic call charges.
68
6.3 HYPOTHESIS 3
H0: Type of offer given by Mobile network service provider is Independent of
occupation
H1: Type of offer given by Mobile network service provider is not Independent of
occupation
The appropriate statistical test is: Chi Square contingency test
α = .o1 N = 9
N = Degree of freedom
Observed Frequency:
OFFERS
SMS Offer
Free Internet usage
Low Call Charges
Others Row Total
Business 4 2 1 0 7
Service 2 1 15 7 25
Student 10 4 16 2 32
Others 1 0 3 1 5
Column total 17 7 35 10 69
Expected Frequency:
OFFERS
69
SMS Offer Free Internet
usage Low Call Charges
Others
Business 1.72 0.71 3.55 1
Service 6.16 2.53 12.68 3.63
Student 7.8 3.24 16.23 4.63
Others 1.23 0.5 2.53 0.72
O E (O-E)2/E
4 1.72 3.02
2 6.16 2.8
10 7.8 0.62
1 1.23 0.04
2 0.71 2.34
1 2.53 0.9
4 3.24 0.18
0 0.5 0.5
1 3.55 1.83
15 12.68 0.42
16 16.23 0.00
3 2.53 0.08
0 1 1
7 3.63 3.13
2 4.63 1.5
1 0.72 0.11
Total 18.48
70
Chi Square Calculated = 18.48
Chi Square Tabulated = 21.67
Here Our Tabulated Value is more than Calculated Value. (i.e. 21.67 > 18.48)
So, H0 is accepted.
So, Type of offer given by Mobile network service provider is Independent of
occupation .
71
6.4 MARKOV ANALYSIS
Transition Matrix
Vodafone Airtel Idea Reliance Others
Vodafone 51/60 3/60 2/60 1/60 3/60
AIrtel 7/45 32/45 4/45 0/45 2/45
Idea 6/30 3/10 18/30 1/30 2/30
Reliance 5/12 3/12 1/12 3/12 0/12
Others 9/34 8/34 6/34 3/34 8/34
Vodafone Airtel Idea Reliance Others
Vodafone 0.85 0.05 0.03 0.016 0.05
Airtel 0.15 0.71 0.09 0 0.044
Idea 0.2 0.1 0.60 0.033 0.066
Reliance 0.416 0.25 0.08 0.33 0
Others 0.26 0.23 0.17 0.088 0.23
Current Market Share
Vodafone Airtel Idea Reliance Others
0.33 0.24 0.17 0.066 0.187
Formula
St = I P(t-1)
St = Market share after t years
I = Initial Market share
P = Transition Matrix
72
St = [ 0.33 0.24 0.17 0.066 0.187] 0.85 0.05 0.03 0.02 0.05
0.15 0.71 0.08 0 0.04
0.2 0.1 0.6 0.03 0.06
0.42 0.25 0.08 0.33 0
0.26 0.23 0.17 0.08 0.23
S3 = [0.362 0.260 0.212 0.0456 0.1209]
Hence market share after three years will be as follows
Vodafone 36.2%
Airtel 26%
Idea 21.2%
Reliance 4.56%
Others 12.09%
73
CHAPTER 7
KEY FINDINGS
74
FINDINGS
92% of the respondents are aware about the mobile number portability. Only
8% of the surveyed people are not aware.
Out of 92% who are aware about MNP, 38% of them have use MNP and rest
62% are satisfied with their current service provider.
Vodafone has the maximum retention rate of 85% and minimum churn rate of
15% among all the service providers. Whereas Others which include Uninor,
Tata Docomo, Aircel, BSNL, etc has the least retention rate of 23% and high
Churn rate of 77%.
Those who switched their networks using MNP, 49.25% of them has got low
call charges as their switching benefit and only 10% of them got free Internet
data plans.
Vodafone was the most preferred network by those who used MNP to which
44% of the respondents switched and Tata Docomo was the least preferred
network provider to which only 12% of them switched.
Use of MNP by several respondents was done due to high call charges
provided to them by their current service provider.
VAS (value added services) was the least preferred criteria for using MNP.
Most of the users of MNP switched to Vodafone and Airtel for proper network
coverage.
Some of them switched to Idea and Reliance to attain several VAS (value
added services) and rest preferred to switch to Others such as Uninor,
Docomo, Aircel, BSNL, etc for Economic call charges.
75
CHAPTER 8
SUGGESTIONS
76
SUGGESTION
The industry like Idea, Reliance and BSNL should improve their promotion
in such a way that consumer attract towards these services as we found
that these three services has too less customer as compare to Vodafone
and Airtel.
Vodafone and Airtel should continue to improve the promotion and
advertising which already placed in customers mind like Vodafone “zoo‟s
zoo ad” and Airtel “har friend zaruri hai offer”.
We came to know that in Ahmedabad Vodafone gain most of the
consumers with the help of MNP and service providers such as Uninor
Tata Docomo BSNL lost most of them so they need to enhance their
services.
The main factor which influences the consumers to switch their service
provider is the network coverage because of which Reliance Idea BSNL
and Uninor need to take care of it to retain their customers.
Reliance need to enhance their customer handling capabilities as their
customers are not satisfies with their query handling employees in their
customer care.
MNP processing time should be reduced and also the process must be
much simpler as most of the customers who were not using MNP
suggested these two reasons.
77
CHAPTER 9
CONCLUSION
78
CONCLUSION
The purpose of the study was to know the consumer awareness about MNP
and we found that majority of the surveyed respondents were aware about it.
Another purpose was to know the factors influencing customers to switch their
network and we found that greed of economic call charges and use of various
VAS.
Most important purpose of this research was to find retention and churn rate
of various service provider and we found that Vodafone retain most of their
customer and Uninor Tata Docomo had high churn rate.
With the overall data and market research we can conclude that MNP are
growth drivers of the Indian telecom industry. MNP has its own impact on the
industry and consumer perception regarding the same will change over a
period of time as it is a new concept in the market and will take some time to
be acceptable
79
CHAPTER 1
BIBLIOGRAPHY
80
Bibliography
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http://www.dnb.co.in/IndianTelecomIndustry/OverviewTI.asp
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http://www.dnb.co.in/News_Press.asp?pid=723
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http://www.dot.gov.in/osp/Brochure/Brochure.htm
(2013, January 5). Retrieved from http://www.indiatelecomonline.com:
http://www.indiatelecomonline.com/india-telecom-subscribers-december-2012/
(2013, Feb 3). Retrieved from http://www.bgr.in: http://www.bgr.in/tag/mobile-number-portability-
statistics-for-india/
(2013, January 24). Retrieved from http://www.mobilenumberporting.in:
http://www.mobilenumberporting.in/news/latest.php
(2013, Febuary 5). Retrieved from http://telecomtalk.info: http://telecomtalk.info/mnp-user-
experience/
(2013, Febuary 13). Retrieved from http://numberportabilityindia.com:
http://numberportabilityindia.com/RULES
(2013, Febuary 12). Retrieved from http://www.mnp-india.com: http://www.mnp-
india.com/trai/204-29-million-subscribers-opt-for-mnp
(2013, Febuary 18). Retrieved from http://telecomtalk.info:
http://telecomtalk.info/category/mobile-number-portability-mnp/
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http://en.wikipedia.org/wiki/Mobile_number_portability
(2013, Febuary 17). Retrieved from http://stakeholders.ofcom.org.uk:
http://stakeholders.ofcom.org.uk/consultations/gc18_mnp/summary
(2013, January 25). Retrieved from http://www.rupya.com:
http://www.rupya.com/2011/01/21/mobile-number-poratability-so-did-you-change-your-
number/16281
(2013, Febuary 20). Retrieved from http://www.mnp-india.com: http://www.mnp-
india.com/trai/mnp-to-safeguard-subscribers
(2013, january 21). Retrieved from http://www.indiastudychannel.com:
http://www.indiastudychannel.com/experts/25704-How-do-I-apply-for-Mobile-Number-
Portability.aspx
81
(2013, january 26). Retrieved from http://ideas.repec.org:
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(2013, 2 24). Retrieved from http://articles.timesofindia.indiatimes.com:
http://articles.timesofindia.indiatimes.com/2013-02-21/telecom/37220766_1_mnp-
regulations-mobile-number-recipient-operator
(2013, Febuary 12). Retrieved from http://www.infosysblogs.com:
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management/2011/01/mobile_number_portability_mnp.html
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(2013, Febuary 17). Retrieved from http://timesofindia.indiatimes.com:
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(2013, Febuary 14). Retrieved from http://learntelecom.com:
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(2013, Febuary 6). Retrieved from http://www.business-standard.com: http://www.business-
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82
CHAPTER 11
ANNEXURE
83
QUESTIONNAIRE
Market Research on Effect of Mobile Number Portability on Consumer and
Service Provider
We student of GLS-ICT required to understand the market study on Effect of Mobile
Number Portability on Consumer and Service Provider as per university guideline. I
assure you that the information provided by you will be used only for academic
purpose and kept confidential.
1. Do you use a mobile phone?
Yes No
(If „Yes‟ then move to the Question 2, If „No‟ then thanks for your time and
cooperation)
2. Which mobile phone do you use?
Single SIM
Dual SIM
Triple SIM
Quadra SIM
3. Are you aware of MOBILE NUMBER PORTABILITY (MNP)?
Yes No
(If „Yes‟ then moves to the Question 4, If „No‟ then thanks for your time and
cooperation)
84
4. Which service provider‟s services you are using currently? Since how long
you are using that service?
BRAND Currently
Using
Time
Duration(Years)
Vodafone
Airtel
Idea
Reliance
Other______
(Other Mention)
5. Have you used MOBILE NUMBER PORTABILITY (MNP) service in past?
Yes No
(If „Yes‟ then moves on to the Q6, If „No‟ then move to Q8)
6. To which service provider you switched from the older one using MNP? Since
how long you are using new provider‟s services?
Old Service
provider
New Service
Provider
Duration
85
7. What are the benefits that you have got after switching to new service provider?
And for how many months?
OFFERS Select No. of Months Remarks
SMS Offer
Free Internet Usage
Low Call Charges
Other __________
(Mention)
(Move to Question No 10 after completing Q7)
8. Select the most appropriate reason for not using MNP? (Select Anyone)
*(If you are not satisfied with the current mobile network service move to Q9
Otherwise move to Q10)
Reason Select
*Satisfied with the current service provider
A processing fee of switching is high
Complicated Process of switching
The processing time is longer
Other (Mention)_________________
86
9. Select your preferred mobile network service?
BRAND Select
Vodafone
Airtel
Idea
BSNL
Reliance
TATA
Docomo
Other
10. Which factor do you give more priority for switching to new mobile network service
provider? (1= Most Preferred and 4= Least Preferred )
11. Rate your current mobile network service provider on different attributes.
Economic call charges
Network Quality
GPRS
Customer service
VAS
Highly
Dissatisfied
Dissatisfied Moderate Satisfied Highly
Satisfied
Customer
Care
Network
Recharge
Availability
VAS
87
Personal Details:-
1. Name:-_____________________________________________
2. Age:- Less than 18 years [ ] 18 to 25 years [ ]
25 to 40 years [ ] Above 40 years [ ]
3. Gender :- Male [ ] Female [ ]
4. Qualification: -_____________________________
THANK YOU FOR YOUR TIME AND COOPERATION