MOBILE NUMBER PORTABILITY

By: Ashutosh Kalra Ashwini Kumar Gogoi Esha Malhotra Jeet Khushhal Gupta Kirti Sharma

What will we covering

 WHAT IS MNP  WHY MNP  CHALLENGES  IMPACTS  LIVE EXAMPLE OF MNP

Evolution of Telecom In India

ILD services was opened to competition Go-ahead to the CDMA technology 2002 2000 Internet telephony initiated Reduction of licence fees

Private players were allowed in Value Added Services

Independent regulator, TRAI, was established

BSNL was established by DoT

Calling Party Pays (CPP) was implemented 2003 Unified Access Licensing (UASL) regime was introduced Reference Interconnect order was issued

Number portability Intra-circle merger was proposed guidelines were Attempted to (pending) established boost Rural telephony 2004 2005 2006 Broadband policy 2004 was formulated targeting 20 million subscribers by 2010 2007

INDIA

1994 1992 National Telecom Policy (NTP) was formulated 1997

1999

NTP-99 led to migration from high-cost fixed license fee to lowcost revenue sharing regime

Decision on 3G FDI limit was services (awaited) increased from 49 to 74 percent

Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry. ILD International Long Distance

MOBILE NUMBER PORTABILITY

Keep single mobile number lifetime
 Mobile number portability (MNP) allows mobile phone users to keep their number when changing from one network to another carrier  Applicable to both CDMA and GSM, as well as post-paid and pre-paid categories of clients  Is the greatest upside and improvement of network quality and customer service expected in telecommunications

WHY MNP ?

Moving to a new city, and city falls in same circle Current network seems to be having costly calling rates. Network issue.

Main reason for leaving your current operator ?

The main reason for switching existing operator came out to be the Tariff followed by Network Coverage.

SURVEY
Will you change your Operator?

Indian mobile users are ready for Mobile number portability. Almost 80% of people said they will use MNP and will change their existing operator

Challenges
CHALLENGES for OPERATORS Huge Costs Customer Retention/ Increased Competition Infrastructure Upgrade Cost Recovery and Bill Reconciliation/Query

CHALLENGES for CONSUMERS

If the new city one is moving to isn t in same circle, MNP is useless for him/her Not happy with services, wait for 90 days.

Impact of MNP on Mobile Operators

Operators who are having existing pool of strong customer base will be able to retain customer by providing competitive services New telecom service providers can survive in the market by providing competitive tariffs and VAS ARPU is likely to improve as customer reduce number of active connection of several operators Competition among telecom service providers is increasing Profit margins are likely to erode Complex task to find out subscribers owns by operators as it can change service providers when ones found better value for money

Positives

Negatives

Impact of MNP on Mobile Subscribers

Subscribers would likely to have efficient services at cheapest rate Can retain one number lifetime while choosing competitive plans from other operators. CDMA users can switch to GSM network. A subscriber is eligible to make a porting request only after 90 days of the date of activation of his mobile connection. Subscribers transferring the mobile number with some balance amount, no credit transfer would be allowed to the new account. Consumers allowed to change operators within their registered circle only (So if you are moving to another city and want to retain your mobile number, MNP is not the answer).

Positives

Negatives

Which new Operator you will select ?

Ref: Telecom Daily

Airtel the most preferred operator after Vodafone

AIRTEL - Company History

y 1995

mobile service brand in Delhi and HP and BT acquires a stake y 1996-97 Formed Bharti BT VSAT Ltd y 1999-2000 Acquires JT Mobiles in Karnataka, AP and Punjab y 2001-02 Launches IndiaOne , 8 new licenses in the East, becomes largest operator, launches Airtel tune y 2003-04 Association with Ericsson, IBM, RIM y 2006-07 Forays into Sri Lanka and US, tie up with Google and Microsoft

Airtel Strategy
MANTRA : Focus on Core Competencies and Outsource the rest!
Product Innovati on

Pricing

Core Competenci es

VAS

Marketi ng and Brandin g

AIRTEL
 Leading global

telecommunications company  19 countries operations across Asia and Africa  Offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers  Has been ranked among the six best performing technology companies in the world by business week

Subsidiary Companies
y Bharti Hexacom y Bharti Comtel y Bharti Aquanet y Bharti Broadband y Bharti Infratel y Bharti Telemedia y Bharti Airtel(UK,US,Canada, Hongkong, USA, Lanka)

Share Capital
y Rs 8,340.15 million raised through the IPO y 2002 Went Public y Shares in issue
y 1,898,101,604 as at September 30, 2008

y Market Capitilization
y Approx. Rs. 1,371 billion

y P/E
y 19.98

y EPS
y 36.16

Some Key highlights

Balance Sheet Total Share Capital Net Worth Total Debt Net Block Investments Net Current Assets Total Assets Amount in Rs. Cr 1897.91 20241.49 6570.34 19030.65 10952.85 -5922.94 26811.84 Net Sales Other Income PBDIT Net Profit Income Statement (Sep '08) Quarterly 8274.37 28.43 3151.06 1604.78 (Mar '08) Annual 25703.51 235.86 10736.89 6244.20

Key Ratios
Key Ratios - Airtel Debt-Equity Ratio Long Term Debt-Equity Ratio ROCE (%) RONW (%) Mar-08 Mar-07 Mar-06 Mar-05 0.38 0.35 34.88 39.53 0.54 0.5 34.07 43.04 0.83 0.76 22.55 31.82 0.6 0.5 23.96 23.88 Mar-04 0.07 0.03 0.16 -0.27

Key Ratios - Industry Debt-Equity Ratio Long Term Debt-Equity Ratio ROCE (%) RONW (%)

2007 0.35 0.3 9.72 10.11

2006 2005 2004 2003 0.21 0.27 0.34 0.36 0.19 0.24 0.29 0.33 10.28 8.25 8.43 3.07 10.62 10.87 6.76 0.18

Income and Expenditure(Rs. Cr)

30000 25000 25,874.20

20000 17,987.30 15000 15107.75

Big Margin

11,272.22 10000 6,446.06 5000 5,156.34 7206.71

10621.14

63.15 0 Mar '04

35.76 Mar '05 Mar '06 Mar '07 Mar '08

Total Income (Rs. Cr.) Total Expenses (Rs. Cr.)

WHY AIRTEL ?
Airtel's 3G services can also be availed with Mobile Number Portability with attractive offers.

Steps to move your mobile number to AIRTEL

 To begin with, you need to generate UPC (unique porting code) by sending SMS to 1900. UPC is an alphanumeric code allocated, upon request, by a mobile operator to its subscriber for the purpose of facilitation of porting of his/her mobile number to another operator. SMS to be sent : PORT <your Mobile Number> to 1900. Operator SMS charges will be applicable. Eg. SMS PORT 98XXXXXXXX to 1900  After sending SMS to 1900, you will receive UPC (Unique Porting Code) as a SMS from 1901 giving 8 digit alpha-numeric Unique Porting Code (UPC) and UPC expiry date in MM/DD/YYYY format  Visit your nearest airtel outlet / showroom  Fill airtel Mobile Number Porting (MNP) form providing details like Current Mobile Number Current Operator name UPC code  Submit Address & Id proof documents, self-attested photo and last bill copy of postpaid connection (if applicable) along-with filled MNP form and Customer Agreement Form

Continued
 Buy the Airtel MNP SIM card from Airtel outlet / showroom. SIM charges, talktime value and porting charge are non-refundable in the event of cancellation / rejection of port-in request  Airtel will send an SMS on your old/existing operators SIM (existing connection) intimating about the porting date and time, i.e. the date and approximate time till when you can continue to use your existing operators SIM card.  There will be a 2-hour no service period which will begin after the porting time as given above. The no service period will be between 12 midnight to 5 am during which your mobile service will not be active on any SIM. All efforts will be made to ensure that this no service period causes minimum inconvenience to you  After the no service period, you can replace your existing operators SIM card with the new airtel SIM card in your handset

Once your Airtel SIM card is activated you would be ready to enjoy airtels high-quality network, innovative value added services and best-in class customer service using your existing mobile number.

KEY POINTS
 Toll Free Number 1800 103 1111  Nominal porting fee of Rs.19 at the time of making the porting request  MNP would be available only within the same telecom Circle (licensed service area) i.e. you can switch mobile operators within your telecom Circle only. Example a customer from Delhi telecom Circle can switch operators within Delhi telecom Circle and not outside Delhi telecom Circle.  Offers: Those who recharge their mobile with 27 rupees will get life time validity along with 1 paisa per second pulse rate for all local and STD calls. This offer remains for one year. Those who recharge with 222 rupees will get full talktime

AIRTEL GROWTH RATE

Bharti Airtel remains the top player in Indian telecom industry with mobile subscription base of 162.2 million after the end of March 2011 after MNP Launch

Airtel added 1,48,215 number of subscribers after MNP Launch

Airtel is the top most in demand for subscribers across the country to switch to with the help of MNP
(ref: Xcel one of India s leading end-to-end market research firms that provides custom market research solutions)

For the current year

86% 58% 79% 100%
Customer Growth Rate Increase in Revenue Increase in EBITDA Growth in Profit

LIMITATIONS to MNP
Consumers allowed to switch operators only 90 days after a connection is activated. Consumers allowed to change operators within their registered circle only (i.e. if you are within the Gujarat circle you cant shift to a Karnataka circle and so on)

MNP Statistics
From 20th Jan 2011 till end of February 2011, source TRAI

All India MNP Port-in / Port-out Data

Huge Customer Potential High Growth Rate Liberalization efforts by Govt Lower Capital expenditure for switching between Operators

Poor Infrastructure Late Adopters Competitive Market Difficult to switch from one operator to other Strengths Weakness

Opportunities

Threats Telecommunication Policies Declining ARPU Govt. policies Content Piracy

Better Service Quality Healthy Competitive approach for operators Promotes more services to customer

Appendix
List of Codes for Service Providers

Appendix
List of Codes for Service Area

Appendix
MNP - SLA
Business days: Excludes Sunday s and state Holidays Calendar days: Includes Sunday s and state Holidays. Port Validation Time: 24 Business hours Hrs. Maximum allowed Time difference between message 1002 and message 1003. Port cancellation Time: 24 Hrs Business Hours. Maximum Time difference between message 1001 and 3001. Port Deactivation and Activation: 1 Business hour each. Total 2 hrs. Non Payment disconnect Initiation : 89 calendar days. Maximum time allowed between 1010 and 7001. Non Payment disconnect response time: 15 calendar days. Maximum permissible time between 7001 and 7003. Port Termination Time: 90 calendar days/3 Months Re Port In Time: 90 days from the time the number is broadcasted

Thank you !!