Even as mobile number portability (MNP) is only a week old, telecom operators say about 90 per cent of customers who opted for a new service provider are pre-paid subscribers. The remaining 10 per cent of post-paid customers constitute 30 per cent of the revenue, and the pre-paid make the rest.
The trend reflects two interesting facts — losing pre-paid customers to others, who have very low average revenue per user (ARPU), might not be bad at all. That is because the cost of servicing such customers is very high. But that is good provided that the operators are able to woo high-paying post-paid customers.
So while one might be a net loser in terms of number of subscribers (difference between the number of subscribers who ported in against those who ported out) the provider can be a gainer in terms of increase in overall revenues.
Industry sources say, on an average around 200,000 porting requests were received from across the country. "As of now porting request numbers are insignificant in the overall scheme of things," said an industry source. India has around 700 million wireless subscribers, according to the latest numbers by Telecom Regulatory Authority of India (TRAI).
According to sources tracking porting numbers companies such as Bharti have been able to retain most of their post-paid customers, though they have lost the pre-paid ones. "As the largest incumbent, one expected that a lot of its post-paid customers would have shifted, but we are not witnessing any such trend," said the source.
Around 11,000 of Reliance Communications' customers, on the other hand, have given requests to port out of the network. At least 280 of its post-paid customers wanted to leave the network, while it has got port-in requests from 1,190 post-paid subscribers, sources say.
Analysts say a large number of pre-paid customers would bring down the average of companies, especially the incumbents. "In case of pre-paid customers, the cost of servicing would be higher than the revenue that could be earned from them. This is a disturbing trend," said Mrityunjay Kapur, Country Director, Protiviti India.
On average, the cost of servicing per month for a subscriber is around Rs 100. However, there are quite a few pre-paid connections which give a much lower yield at around Rs 80-120, making it a losing proposition to gain such customers.
Operational costs will also go up as a large number of subscribers add into the network. Analysts say this would put pressure on the network causing congestion, and reducing service quality to the high ARPU customers, who are present in larger numbers in incumbent operators' networks.
The rules of MNP say a network cannot refuse a customer coming into the network, and hence cannot control the quality of subscribers that could enter their networks. Experts say the direction of migration could be towards incumbents.
They are, however, not worried about loosing numbers in pre-paid.
"In pre-paid, the churn has always been high and now with MNP coming in, these customers would churn anyway as they are brand-agnostic. Even if operators lose these customers, they won’t be crying over them,” said Alok Shende, Principal Analyst and Founder of Ascentius Consulting.
He said incumbents would now eye a share of each other’s pie, especially those subscribers which have an ARPU of Rs 2,000 and above, instead of targeting the entire market.
"These are initial days of launch of MNP where there are no bundles and no new offers by companies. Going ahead, we might see them," he said.
Experts also say that most of the porting requests might not translate into actual shifts, as many subscribers might be using this to negotiate better offers with their current operators. "There would be short-term pressure because of high movement in the first few months. But this activity will be stabelised in another six months" said Gandhi.
