Caller, Beware

• MNP rollout deadline has been postponed twice. Current March 31 deadline unlikely to be met.
• Leading players Airtel, RCom, BSNL, Vodafone and Idea may lose customers once MNP starts
• Many operators not ready with equipment. BSNL/MTNL haven’t even ordered it.
• Security issues over proposal of Telcordia, one of two firms licensed to implement MNP
• Mobile operators haven’t sorted out inter-operator issues

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Forget for a flash all the brouhaha around the delay in auctioning “cutting edge” 3G licences. A far more fundamental telecom revolution for the consumer—mobile number portability, or MNP, which allows consumers to change mobile operators while retaining their phone number for a marginal fee of Rs 19—remains stillborn. The implementation of MNP has already been postponed twice, from September 2009 to December 31, 2009, to, finally, March 31, 2010. Short of a miracle, the latest deadline will lapse too.

What’s behind these regular delays in a patently consumer-friendly move? On the face of it, it’s a combination of regulatory and technical issues. But scratch deeper, and it becomes clear that a cosy club is at work to delay implementation of MNP as long as possible.

For one, the implementing ministry—Department of Telecommunications —has been slow in clearing the glitches, including passing equipment orders of the telecom PSUs. “MNP will not happen even in March as we are not prepared for it. It has been successful only in countries where there has been a regulatory push,” avers Romal Shetty, kpmg’s telecom practice head.

Then there is the distinct feeling that the larger telecom players (who conceivably will have much to lose when MNP kicks in in an era of rising consumer discontent) have a role in influencing the delay. While many operators are yet to get their backend equipment ready, government companies BSNL and MTNL haven’t even ordered the equipment for this purpose.

“The delay in MNP implementation is completely unacceptable,” says Rajeev Chandrashekhar, former telecom entrepreneur and Rajya Sabha member. “With customer service and customer satisfaction at the lowest, MNP becomes an important tool for them. The existing large operators who could lose customers because of MNP would have most to gain by any delay in its implementation.”

The latest trigger for the delay has been “security issues”. Last month, the ministry of home affairs scrutinised the issue vis-a-vis Telcordia Technologies—one of the two companies given licence to implement MNP in India—because of its operations in Pakistan. Last year, the government had given licences to Telcordia to implement MNP in the south and east of India and to Syniverse Technologies for the north and west. The two US-based companies were required to set up a centralised database, query response and clearing house for routing and termination of calls.

Last month, the US embassy communicated its concern. In a letter addressed to finance secretary Ashok Chawla, minister counselor at the US embassy Carmine D’Aloisio wrote: “Telcordia Technologies and MNP Interconnection Telecom Solutions have jointly incurred over $10 million in expenses to date....This is a significant sum that could be jeopardised if the licence is suspended or cancelled...I would like to ask that Telcordia Technologies be treated in a fair manner during this re-evaluation process....”

While DoT sources say the issues will be cleared soon, there is no official notification. Saying Telcordia had responded to queries, home secretary G.K. Pillai told Outlook, “We are looking into the matter”. Observers, however, feel that these issues could just be delaying tactics to give more time to operators—Airtel, Reliance, BSNL, Vodafone etc—to get their house in order. Says a senior telecom company official: “The Telcordia angle is a new piece in the jigsaw rigged up by the home ministry.” After all, other telecos with a presence in Pakistan—Telenor, SingTel, Etisalat—operate in India.

The large operators have also been dragging their feet over implementation. Last week, BSNL, which had been arguing that it could not meet the deadline, stated it would be able to fulfil the conditions by March 31. However, considering that it takes a few months from placing the order for equipment and its shipping, deployment, commercial testing and final implementation, it is uncertain how BSNL would complete the entire process in a matter of just six weeks.

According to trai chairman J.S. Sarma, issues related to BSNL/MTNL’s equipment procurement, interconnection and security were clouding the MNP rollout. “It would require effort by MTNL/BSNL to get equipment in place; with a focused effort they should be able to do it,” he says.

Technically, for MNP to become effective, the entire country’s network has to be ready and tested. All operators—big and small—would have to put in place their equipment, upgrade and reconfigure their existing networks, conduct inter-operator tests and establish links with the MNP operator to declare a “ready” status. The cost: as much as Rs 300 crore per operator.

Barring a few big operators, none are  close to achieving this. While bigger players like Airtel, Vodafone, Idea and Reliance say they are “close to” MNP readiness, many operators are still urging the DoT for more time to sort out inter-connect and inter-operator issues. Service providers feel that the MNP exercise is unlikely to take off unless every operator is ready, without which issues like interconnect and termination cannot be sorted out. Warns Samaresh Parida, director, strategy for Vodafone: “It is extremely unlikely to happen by March 31, because MNP cannot happen unless everybody is ready and is on board.”

With customer dissatisfaction at its peak, Airtel, Reliance, BSNL and Vodafone may have the most number of disgruntled users looking to change operators. But they don’t seem to be bothered. Says Rajat Mukarji, corporate affairs chief at Idea Cellular: “We don’t see this as a major game-changer, but for an initial reaction.” Globally, MNP has seen 15-25 per cent of customers shift operators, but is expected to be lower in India given the huge, cost-focused pre-paid market.

Says Vodafone’s Parida: “Everybody will try to protect their own customers while trying to grab others, and we expect an initial excitement. But in 3-4 months things will settle down.” This air of calm belies the concern over what consumers might actually end up doing.

The DoT is now holding meetings with individual service providers to assess their readiness. Fact is, MNP isn’t rocket science—at last count over 20 countries (including the US, UK, France, Germany) have implemented the customer-empowering service. It’s about time India quickly joined that club.