MNP: Idea biggest gainer, RCom biggest loser

Idea Cellular has emerged as the top gainer from mobile number portability (MNP), attracting almost as many subscribers as its bigger rivals Vodafone India and Bharti Airtel combined, a study showed.

Idea gained 17 million users on a net basis since January 2011, when number portability started, compared with 11.1-million for Vodafone and 7.3 million for Airtel, according to a Kotak Institutional Equities report.

The biggest losers were Reliance Communications, losing 10.8-million subscribers leaving, while Aircel lost 6.6 million and Tata Teleservices 6.4 million, the study showed.

MNP allows subscribers to retain their mobile phone numbers while changing operators.

Number portability has gained in importance as rivalry heats up in a crowded market. The nature of competition has shifted from voice to premium data subscribers and may intensify further when Reliance Jio starts 4G services. The main players in this segment will be the three top players and Jio.

In absolute terms, the top three players lost 88.5 million subscribers to other operators and 123.9 million users opted for their services. Other players combined had 44.7 million port-ins and 80.1 million port-outs.

"These data points suggest a high degree of porting activity within the incumbent pack itself, ie customers porting from one incumbent to another," said Kotak. It added that porting customers generally move up or laterally on the quality "curve", which explains the high level of porting activity among the top operators.

Another major reason for porting within the top telcos is gaps in their hi-speed 3G or 4G data networks.

"We have focused on three core areas that include network coverage, quality of service and service delivery," Rajat Mukarji, chief corporate affairs officer at Idea Cellular, told The Economic Times. "Subscribers choose to shift to a better operator and the study proved that coverage issue remains a decisive factor for customers."

The report noted that since October 2014, market leader Bharti Airtel had an incremental 2.3 million net port-ins, below Idea's 4.5 million additions, even after starting faster 4G broadband services using the LT standard. "Aggressive LTE launches during this time-frame do not seem to have moved at least the MNP needle for Bharti," Kotak said.

The three CDMA players RCom, Tata and Sistema lost a net 8.3 million subscribers with gross port-ins of 2.1 million and 10.4 million port-outs.

"We suspect these were all high-usage voice subs that were stuck with CDMA in the absence of MNP as they did not want to change their number. Sustained sharp decline in CDMA share of voice minutes in the market corroborates this aspect," Kotak explained.

Telenor had a net loss of 4.4 million users, which is high given its market share, and could reflect its operations shrinking to six circles from 13 after licences were cancelled in 2012, Kotak said.

"BSNL's net loss of 2.5 million looks respectable relative to RCom, TTSL and Aircel," it noted, referring to the state-owned Bharat Sanchar Nigam Ltd.