After a delay of more than a year, Mobile Number Portability (MNP) is finally here. While the shifting process is quite simple, takes just a week and costs only Rs 19, the big question really is will the churn be significant enough?
Service providers – old and new – are hoping to catch the big fish in the pond and increase their Average Revenue Per user (ARPU). To make the most of this opportunity, operators have taken a 360-degree approach to the entire exercise. While Idea and Vodafone are the front-runners on mass media campaigns, others like Tata DoCoMo and Videocon are using the social networking world – Twitter and Facebook – to the hilt not only to lure the unsatisfied, but also address queries of the potential-converts.
According to industry leaders, the choice for MNP for customers would be triggered by a number of factors. Companies that have a strong brand proposition, superior network quality, innovative and differentiated products and services and greater predictability of quality of customer service will have an edge. Samaresh Parida, Director, Strategy, Vodafone Essar, feels that high value customers are extremely wary of changing to the new lot of service providers that have limited or untested network coverage and quality. “We, at Vodafone, have made considerable investments in our quality of network and customer services and are geared with the technology to enable number portability. We believe our business and brand proposition backed by the quality of network and customer service, positions us to benefit from MNP,” he said.
MNP has been a key focus for Vodafone and hence the pug, which was earlier considered the mascot, has also been brought back into action to add to the warmth of this brand as it looks forward to welcoming new customers. To increase the cuteness quotient in the TV communication, Vodafone has again used kids along with a hummable tune and a simple punch line “Everybody’s welcome”. The operator is effectively using radio too to reach out to the customers – who want to retain their old number, but want to switch to a new operator.
Being persuasive, Vodafone has also put up “10 Reasons to Join Vodafone” on its official website to persuade the indecisive customers to join the network.
What an idea!
However, it was Idea Cellular that was the first to come out with a TVC, along with its brand ambassador Abhishek Bachchan, promising a better network, better value for money and even better customer services through its campaign: “No idea? Get Idea”.
While Airtel hasn’t come up with a mass media campaign, and nor is there much activity on its Facebook accounts, however, it is offering a special ‘Airtel surprise’ package on its official website to customers wanting to switch to Airtel. The package “could have free talktime, special call rates, free SMS, etc.”
If Idea Cellular is more direct in its communication, and inviting on the negativity of customer sentiment, Airtel, like Vodafone is positive in its approach, simply asking the customers to “Move to Airtel. Bring your old number along.”
Amongst the new players, Tata DoCoMo, the GSM brand of Tata Teleservices, carrying forward its chirpy and innovative style of communication, is asking customers to “Move to our world of freedom… without changing your number”. In the bargain, it is also promising that once on the Tata DoCoMo network, one will get “Get freedom from uncaring customer care, hidden cost and conditions, paying for what should be free, Unwanted Value Added Services and Outdated Network”.
While it had a countdown clock to tell the number of hours left to gain “the freedom” on its official website, it ran the “It’s Time to Break Free” contest – from January 14, 2011 to January 19, 2011 – for its Facebook, Orkut and Twitter fans. The question was: “In your land of freedom, what do you want freedom from and why?” The most innovative answer stood a chance to win a 16GB Apple iPod Touch.
Deepak Gulati, Executive President, Mobility Business Division, Tata Teleservices, feels that the MNP regime will give a new direction to the Indian telecom industry and the power of choice to the customers. He is confident that while retaining its existing customers, Tata DoCoMo, will only gain further. “We are sure our cutting-edge technology and a robust network will help us not only retain our more than 8.5 crore happy and satisfied customers, but also gain the position of operator of choice in the new regime. Our MNP strategy will ride strongly on a simple tariff structure and strong customer care and service levels,” he said.
Not far behind is Aircel, which is playing on its tagline: “The future is calling. Join in’, to induce customers to explore Aircel’s “world of possibilities.” Meanwhile, public sector players Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), too, are using the print medium to ‘switch’ and ‘join’ the respective players, “while retaining your existing mobile numbers.”
Like Airtel, which is offering goodies to customers, Videocon, too, is offering free calls for the first one month at Rs 59 for all subscribers who opt to ditch their existing relationships in its favour.
Besides being at large on media, most of the mobile operators have created a toll free helpline number to address customer queries related to MNP. For Airtel, one can dial – 18001031111; for Vodafone the toll free number is 1800-1234567. Customers wanting an Idea can call up on 18002700000, and information for Tata DoCoMo can be sought at 1800-266-0000. MTNL Delhi helpline can be accessed at 1800111503, and Aircel seekers can dial 9716397163 (chargeable).
Interestingly, one player that is least worried about losing customers is Reliance Communications (RCOM) and is not pursuing it aggressively. According to a senior RCOM official, “Churn in the Indian telecom space is quite natural and the introduction of MNP will not make a definable change in the numbers. Hence, we do not see a point in investing in this through a mass media campaign.”
If numbers are anything to go by, then there’s some substance in the Airtel, RCOM strategy. Haryana, where MNP was introduced about two months ago, has had only 80,000 movers of the nearly two crore subscribers, according to a study by ICRA (formerly Investment Information and Credit Rating Agency of India).
Intricacies of the Indian telecom market
John Strand, CEO of Strand Consult (a leading global consulting and research agency on telecom and media), averred, “The key characteristics of the Indian telecom market are the problem of low customer loyalty, high churn, and declining prices.” It is also a market which has about 95 per cent subscribers in the pre-paid segment. The attribute of low loyalty makes customers follow the use-and-throw policy for their SIMs. For them, changing number does not contribute to any kind of opportunity cost.
Also, the Indian customer is value conscious, hence, switching a number may mean monetary loss to them. Yet, they can wriggle out a solution for themselves. To make the most of the aggressive pricing strategy offered by the second rung operators (read Uninor, MTS, Tata DoCoMo), these price conscious customers have established virtual number portability. The basic premise for this is that a person will retain the existing number, but will use it only to receive calls. Meanwhile, there is a secondary number, which can be flexible depending on who is offering better calling rates. Handset brands like Micromax, Karbonn, and Lava, too, have helped in the phenomenon by offering value for money dual-SIM handsets. To that effect, MNP has little to offer to these customers.
Some will stay put
Additionally, for a telecom company, too, it makes sense to churn out only high ARPU customers and these customers have been associated with their respective brands for quite some time now. These customers have in their own way developed a connect and an emotional attachment with these brands. Hence, some of them might have a resistance to change even if they are not completely satisfied with their current operator.
With the consumer spoilt for choice, the availability of multiple brands has resulted in commoditisation of the telecom service. Everybody seems to be at par when it comes to offering network, pricing and even customer service, and the little differentiation will further ensure that people remain in their comfort zone, even if there are better services being offered. According to a leading analyst with a broking firm, “MNP will look at adding more pressure on the overall profitability of the telecom companies and for the first time, one may see post-paid ARPUs being under pressure”.
In realistic terms, there’s little that the telcos stand to gain from the introduction of MNP. According to Strand, MNP will increase competition for high-consuming customers and business customers. In the current scenario, he expects consolidation as a solution to increase ARPUs. “I think different operators will have a different approach to attract new customers. Also, with market conditions becoming increasingly hard, if consolidation does not start soon, then there will be players who withdraw from the market!”