Number portability to drive down call tariffs

by | March 5, 2013 10:40 am



The commencement of the much anticipated Mobile Number Portability (MNP) scheme by the end of the first quarter of this year, will drive down tariffs as telecommunications operators battle fiercely to attract and retain phone subscribers, a new report has shown. Industry analysts told BusinessDay that the number portability scheme, when introduced, would enable the holders of Nigeria’s over 113 million lines to retain their phone numbers when changing from one mobile operator to another. BusinessDay sought the views of some industry analysts.

Phone tariffs, according to one of them who pleaded anonymity will drop by about 50 percent one year after the scheme, expected to deepen competition in the telecoms industry kicks-off. Currently, the average GSM call per minute is N15 to N30. The report by Oxford Business Group (OBG) suggests that the entry of UAE’s Etisalat and India’s Airtel had increased price competition significantly. Off-network peak period tariffs stood at N42 in 2008 and N36 in 2009, while on-network peak tariffs averaged N36 to N26 respectively for the same years.

The report says the struggle for subscribers in the telecoms industry will assume a new dimension with the launch of number portability, further adding that telecoms operators will be compelled to further drop prices as a strong incentive to lure and retain customers on their respective networks. Usen Udoh, director, high communications, Accenture Nigeria holds a divergent opinion. “In a multi-SIM environment, MNP’s impact in terms of reduction of phone tariff is usually minimal”, he told BusinessDay in a phone interview.

Osondu Nwokoro, director, regulatory and government affairs, Airtel Nigeria, told BusinessDay in an interview, “Mobile number portability will address quality of service issues (QoS) and high tariffs. “It will drive competition in the industry because if an operator fails to provide good QoS, a subscriber has the freedom to switch to another network. It will definitely encourage all telcos to provide services at an optimal level”, he added. For Bill Best, former CTO for GSMA competition is the driving force for better QoS, new products, wider distribution and – crucially – more affordable price plans.

The Nigerian Communications Commission (NCC) has expressed its commitment towards starting scheme this quarter of 2013. The commission hopes that the scheme will strongly motivate telecoms networks in Nigeria’s highly competitive market to improve quality of service or risk losing mobile subscribers. Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON) has warned that MNP is no silver bullet for sub-optimal quality of service in telecoms. “I can’t assure you that it will improve QoS and I will tell you why.

“If one network has glitches or goes down for whatever reason, I don’t have any guarantee that the other networks will have enough headroom to accommodate the capacity of the network that has gone down,” he said. “If the biggest player, for instance, experiences some glitches and telecoms subscribers migrate to the smaller players, the smaller players will not have enough head-room. It is simple logic,” Adebayo stated. Only recently, the telecoms regulator released a new draft regulation document to provide a framework for the operation of the scheme in the country.

Taking a look at how number portability has panned out in other economies, mobile number portability has become a very useful tool for subscribers not satisfied with the level of quality of service offered by their telecoms operators. In India, despite initial apprehensions, more than 23 million subscribers registered for MNP in less than 10 months of its nationwide launch in 2010. In Ghana, one year after introducing the MNP, the country’s National Communications Authority said over 350,000 subscribers successfully moved from one service provider to another, while retaining their original numbers. The MNP system was initiated in Ghana on July 7, 2011. It is expected that such sizeable amount of subscribers will migrate to other networks when the service comes on stream this year. 

 

Stories by BEN UZOR JR