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

29

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

(2013, 1 2). Retrieved from http://www.dnb.co.in:

http://www.dnb.co.in/IndianTelecomIndustry/OverviewTI.asp

(2013, january 2). Retrieved from http://www.dnb.co.in:

http://www.dnb.co.in/News_Press.asp?pid=723

(2013, January 4). Retrieved from http://www.dot.gov.in:

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/

(2013, January 5). Retrieved from http://en.wikipedia.org:

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:

http://ideas.repec.org/p/soz/wpaper/0303.html

(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:

http://www.infosysblogs.com/customer-relationship-

management/2011/01/mobile_number_portability_mnp.html

(2013, January 21). Retrieved from http://hellboundbloggers.com:

http://hellboundbloggers.com/2011/01/20/mobile-number-portability-in-india/

(2013, Febuary 17). Retrieved from http://timesofindia.indiatimes.com:

http://timesofindia.indiatimes.com/tech/itslideshow/6986884.cms

(2013, January 21). Retrieved from http://profit.ndtv.com:

http://profit.ndtv.com/news/corporates/article-mobile-number-portability-not-much-of-a-

hit-293431

(2013, Febuary 13). Retrieved from http://www.rediff.com: http://www.rediff.com/business/slide-

show/slide-show-1-tech-mobile-number-portability-vodafone-leads/20110504.htm

(2013, Febuary 14). Retrieved from http://learntelecom.com:

http://learntelecom.com/featured/how-mobile-number-portability-works-in-india

(2013, Febuary 6). Retrieved from http://www.business-standard.com: http://www.business-

standard.com/article/economy-policy/trai-starts-pre-consultation-for-nationwide-mnp-

113022000887_1.html

(2013, Febuary 4). Retrieved from http://www.moneylife.in: http://www.moneylife.in/article/how-

to-change-your-operator-through-mobile-number-portability/13298.html

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