Event Update: Mobile Number Portability

Event Update: Mobile Number Portability
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First Published: Wed, Jun 03 2009. 01 25 PM IST

Updated: Wed, Jun 03 2009. 01 25 PM IST
Mobile Number Portability (MNP) could be a reality as early as September 2009 if all processes and procedures set out by the Department of Telecommunications (DoT) are implemented in a timely manner.
We believe MNP implementation will be a key positive from a consumer point of view, as it will enable subscribers to change their mobile service provider without going through the tedious process of changing their phone numbers.
We believe the major issues likely to lead to the success (or otherwise) of MNP in India will be the cost of porting and the time taken to port numbers.
However, from an operator point of view, we believe it will be a negative for the Indian Telecom Sector.
MNP implementation is likely to put stress on the financials of telecom companies with a likely increase in churn rates (already at 4-5% monthly for pre-paid subscribers), higher subscriber acquisition and retention costs, higher capex investments to improve Quality of Service (QoS) and a likely drop in tariffs, all of which are expected to exert pressure on margins and earnings growth.
We believe ARPUs could get adversely impacted by around 5% and Margins by 100-150bp, which could lead to pruning of EPS estimates by 9-21%.
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First Published: Wed, Jun 03 2009. 01 25 PM IST
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