Monarch Project & Finmarkets Ltd

Monarch Project & Finmarkets Ltd MOBILE NUMBER PORTABILITY

* For Private Circulation Only 05 OCT 2009.

Mobile Number Portability

-Keep Single Mobile Number Lifetime

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Mobile Number Portability

Mobile number portability enables mobile telephone users to retain

their mobile telephone numbers when changing from one network

operator to another. It is a very important concept that should be

implemented in India where total number of mobile subscribers cross

45 crore mark at the end of August 2009. Number portability is also

likely to help new entrants into the Indian mobile-services market,

such as the Indian joint ventures of Telenor and Etisalat. The move to

introduce the MNP comes as the country's mobile subscriber base is

expanding fast, sometimes having an impact on network quality.

Presently, MNP is already existing in many developing and developed

countries across the world.

The MNP option will, however, not lead to a dramatic shift by sub-

scribers from one operator to another, as quality of service and net-

work coverage are not significant differentiators in the Indian market.

The introduction of number portability in other countries did not lead

to a significant shift by subscribers from one operator to another, and

in India too there will be an initial churn of up to 20 percent of sub-

scribers, which will then taper off. Usually, customers do more likely

to shift if new operator will introduce new services or if another op-

erator introduces an aggressive tariff plan.

Types Of Number Portability

1. Wireless number portability relates to transferability between

wireless mobile lines only and not between fixed lines and wire-

less. In most of the country this type of mobile network portabil-

ity is existing.

2. Full number portability allows transfers between both fixed

lines and mobile phone lines. Iceland, Canada and United States

are the only country in the world that offers this type of services.

Unique ID likely to replace Mobile Number

After implementation of the MNP, ones mobile number can be recog-

nized as a unique identification number. As per the announcement by

government of India to introduce Unique Identification Number, MNP

will improve the system by allocating mobile number as a unique

identification. MNP and UID will make KYC and other identification

process easy and convenient to end user as well as authority.

Number portability is

likely to help new

entrants into the Indian

mobile services market

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1. Consumers allowed to switch operators only 90 days after a con-

nection is activated.

2. Consumers allowed to change operators within their registered

circle only (i.e. if you are within the Gujarat circle you cant shift

to a Karnataka circle and so on)

TRAI had issued draft guidelines on MNP but there has been no

information on the charges to shift ones operator. There has been

speculation though which has ranged around 300 rupees. Even now

with the implementation announced in December there is no informa-

tion of what it would cost the subscriber to shift from one operator to

another. But one thing is for sure that subscribers will have to pay

operators non-refundable porting charges for shifting their number.

Charges of MNP

Churn is expected to increase and also from the VAS players perspec-

tive wherein they could benefit due to this churn and could get better

revenue shares from operators for exclusive content that drives reve-

nues. We have also covered result of surveys conducted by Nielsen.

Impact of MNP

It will be rolling out from December 31 2009

Mobile number portability (MNP) will be implemented from December

31 in metros and category 'A' service areas, and by 20th March,

2010, in rest of the country. MNP will come under Act

Telecommunication Mobile Number Portability Regulations, 2009

and TRAI said the MNP facility shall be available only within a given

licensed service area.

Limitations to MNP

How many days it will take to switch operator

The operators to complete the porting of a subscriber's mobile num-

ber within a maximum of four days, with the exception of Jammu &

Kashmir, Assam, and the North East circles, where the process may

take a maximum of 12 days. However the regulator has committed to

bringing down the porting time.

One can not keep their

mobile number same

when moving to new

circle

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Country MNP Implementation Date Time to Port (Days) Charge

Australia 2001 Free

Belgium Oct-02 Free

Brazil Sep-08 Free

Bulgaria Apr-08 2.56 EUR

Denmark 2001

Dominican Republic Sep-09 80.00 DOP

Ecuador Feb-09

Egypt Apr-08

Estonia Jan-05

France Jun-03 10

Germany Nov-02 25 EUR

Greece 2004

Hong Kong Mar-99

India Dec-09 4 to 12

Ireland 2003 Free

Israel Dec-07 Free

Italy Jan-02

Jordan Jun-10 1 TBD

Lithuania 2005

Luxembourg Jun-04

Macedonia Sep-08

Malaysia Aug-08 25.00 MYR

Mexico Jul-08

New Zealand Apr-07 Free

Nigeria 2007

Norway 2001

Oman Aug-06

Pakistan Mar-07

Peru Jan-10

Poland Feb-06 Free

Portugal Jan-02

Romania Dec-08 Free

Saudi Arabia Jul-06

Singapore Jun-08

Slovenia 2005 5 EUR

South Africa Nov-06

Spain 2000

Sweden Sep-01 21 Free

Taiwan Oct-05

Thailand 2010

Turkey Nov-08 Free

United Kingdom Free

Country wise MNP Implementation Date

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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 pro-

viding competitive tariffs and VAS.

3. ARPU is likely to improve as customer reduce number of active

connection of several operators.

Impact of MNP on Mobile Operators

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.

Situation of the Telecom Market post MNP

All operators would be having the same kind of plans available to

retain customer, so customer can choose plan as per their re-

quirement and wont switch to another operator.

If today anyone want to switch then TTML provides the best plan,

as customer has to pay 1 Rs. For the 10 minute.

TATA - DOCOMO is providing GSM plan of pay per second (Pulse

rate of on second). So if person talk for one second then he need

not to pay for the whole one minute, which we are paying right

now.

TATA-DOCOMO has launched SMS services like pay per character

rather than pay per whole message in the existing plans.

All the operators are likely to focus on the competitive plan for the

basic services like calling and messaging rather than on value

added services. Currently Vodafone and Bharti Airtel are the

leader in the value added services.

Profit margins of the

operators are likely to

erode Post MNP

Operators first priority

would be to focus on the

volume driven business

to retain exist ing

computer

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Key takeaways from Nielsen Research Report conducted on

12,500 mobile subscribers across 50 centers in India

More than half (55%) of all respondents were generally satisfied with

their mobile operator and 48 percent were satisfied with the network

quality. Satisfaction scores on network quality dropped for almost all

operators, with Airtel, BSNL and Reliance registering the greatest

drops. 46 percent were satisfied with the network coverage area of

their operator and 43 percent were satisfied with the price they paid

for the mobile phone service by their operator.

Other areas of satisfaction included customer service experience and

quality of voice (both 42%), strength of signal, Voice & Data tariff

options and accuracy of bills (all 41%), indoor coverage (40%),

dropped calls (32%).

Loyalty to operators is seen to be higher among lower socio-economic

groups, older age groups, and among females.

The circles in which subscribers are more likely to shift are Mumbai

and Delhi Metro, UP East and West, Gujarat, Rajasthan, Andhra

Pradesh, Karnataka, Kerala, and Rest of West Bengal.

Circles in which subscribers show higher retention levels are Chennai

Metro, Haryana, Himachal Pradesh, Punjab, UP East, Rest of Ma-

harashtra (does not include Mumbai Metro), Rest of Tamil Nadu (does

not include