Only telcos compliant with portability can launch new services

In a hurry to implement mobile number portability in the country, the government has imposed tough conditions on the telcos for rollout of any commercial service.

After missing the deadline several times, the government had set September 30, 2010, as the new rollout date for mobile number portability (MNP). Portability would allow a cellphone user to retain his number even when he switches over to another service provider in the same circle.

In a communication to the service providers, the Department of Telecommunications (DoT) has said, “permission to launch commercial service in any service area with effect from September 1, 2010, shall be given only to those licencees who are MNP-compliant.”

Any licensee who has been granted permission for commercial launch of service has also to be MNP compliant along with all existing service providers, the DoT communication has stated. Sources in the telecom industry have said that the government is using pressure tactics for meeting the portability deadline.

Besides the significant cost involved in making the mobile networks compliant, the established telecom players in the market also fear that they may end up losing many subscribers to the new telcos once number portability is brought in.

India is a high-growth telecom market, with over 635 million mobile subscribers as of end of June. It is also probably the only country with as many as 14 service providers.

Consolidation is the future of the telecom industry, and not more than 5 to 6 players would survive profitably, according Bharti Airtel CEO Sanjay Kapoor.

In such a scenario, mobile number portability could be a game changer for several telcos, say analysts.

Last year, the government had announced that MNP would be implemented from January 1, 2010. The date was then shifted to April. Subsequently, DoT said mobile number portability would come into effect from June 30. That deadline too was missed.
The Telecom Regulatory Authority of India (Trai) had last year said in a regulation that mobile number portability would cost a subscriber a maximum of Rs19.

This put to rest the concern over a possibly high cost of porting, or shifting, given that most telecom service providers had wanted to be compensated for the “high expenditure” they would incur in the process.