The nationwide roll-out of Mobile Number Portability, a service that allows cellphone users to change service providers while retaining their numbers, is likely to prompt 6-7% of existing users to switch to other operators, say analysts. However, after the first few months, the churn rate will stabilise as operators improve their networks to retain existing subscribers.
"For the first 3-6 months, we might see the churn going up to 6-7% from the current level of about 4% per month, as people who want to change their operator will do so in the first few months. But later, it will stabilise," Ernst & Young (E&Y) Partner and Telecom Industry Leader Prashant Singhal said.
Subscribers across the country have been waiting for the roll-out of MNP to switch to other operators. Customers will have to pay a maximum of Rs. 19 to an operator to change their network while retaining their existing phone numbers and the new operator has the option to either waive the fee or reduce it.
However, a consumer will be required to continue with an operator for a minimum period of three months in order to avail the MNP service.
"We don't see a major impact of MNP. People will change their operator if they face problems in network coverage, quality of service, customer care and not so much for pricing, because today, almost everyone is offering similar tariff plans," KPMG Head of Telecom Romal Shetty said.
However, it is offerings like 3G and other value-added services that will help operators differentiate themselves from the rest of the pack, he said.
"3G licenses have been bagged by specific players. So customers looking for 3G services would move to an operator offering 3G," Shetty said.
Gartner principal research analyst Kamlesh Bhatia was of the view that the scales could tilt in favour of major players.
"The focus would be on customer experience and so the scales could tilt in favour of the bigger players," he said.
Analysts feel that while MNP is unlikely to make a huge difference to the balance sheets of telecom operators, the story could be different if high-usage customers jump ship.
"Though companies are not expected to reduce tariffs, since they are already bleeding, we could see very focused initiatives like discounts and freebies for high usage customers to prevent them from switching," Deloitte Haskins & Sells Partner Hemant Joshi said.