In the past few years, the government and regulators have started a number of schemes to help customers choose or reject their existing vendors. The latest one, portability of liquefied petroleum gas (LPG) connection, was started on a pilot basis in Chandigarh earlier this month. Before this, health insurance covers and mobile numbers were allowed to be ported to a new service provider. And power connections were allowed to be switched in select regions like Mumbai.
Portability in each of these sectors has been around for at least one year. But, it hasn’t been the game-changer it was expected to be. For example, while power portability in Mumbai and mobile number portability have been fairly successful, medical insurance has been a non-starter.
According to industry players, there have been barely 10,000 policies that have actually been ported. And insurers have not helped the cause by making things difficult, as they consider ported policies to be riskier than an existing customer. No one is willing to take a customer who has made even one claim in the past three or even five years. In the higher age bracket, where it is actually required, the process involves extra documentation and medical tests. In the absence of additional commission for porting a policy, the agent is also not motivated.
Similarly, industry experts say that around 70 million requests for porting out of the 700 million subscribers have used the mobile number portability (MNP) till September 2012. While the actual number of subscribers that have ported is not available, industry experts peg the figure at 40 million, more or less in line with the Telecom Regulatory Authority of India (Trai) expectation of churn of five-six per cent, in line with the global average.
Another more-or-less success story is power connection portability in Mumbai. Tata Power saw its customer base jumped from 50,000 in 2009 in Mumbai to over 390,000 today. But it is yet to be launched across the country.
Despite a couple of successes, the primary reason for absence of aggression among customers to port is the cumbersome process – something which LPG porting is also likely to suffer from. “In metros, this will help consumers get good service on the back of competition among distributors. But, till it is started in full swing and there are more channels (other than the online channel) to get in touch with new agencies, it may not be successful,” says Pawan Soni, general secretary of the National Federation of LPG Distributors of India.
The process of switching LPG distributor isn’t easy either. Customers will first need to choose a new LPG distributor online through the LPG Transparency Portal. Once selected, the new distributor will be informed of the customer’s port-in request. The customer will then need to visit the distributor’s office and fulfill the Know-Your-Customer (KYC) norms. Once the KYC is approved, the connection can be ported out provided the existing distributor agrees.
Importantly, there are chances that your choice of distributor may be restricted. In Delhi, distributor groups may be made, each one comprising 10-12 who have strong network in a particular area. And customers may be allowed to port only within the group for their area, says Soni.
