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India – Buy ‘number portability’ for Rs 50

Rashmi Pratap

MUMBAI: The lobby against number portability may be fighting a losing battle. A widget from China priced as low as Rs 50 is making the government’s
dithering on it for four years meaningless and may erode profitability of companies such as Bharti Airtel and Reliance Communications, which are already hit by relentless tariff war.

A chewing gum-sized device known as ‘dual sim card holder’ can be placed under the battery of your mobile phone which has a provision to hold another sim card too, and can be activated whenever there is a need to call. This helps retain your number in use for many years and subscribe to a new operator who is giving away outgoing calls almost for free.

It eliminates the strain of carrying two mobile phones. The device can be used in most of the low-to-middle-end models of any handset maker.

“The lack of institutional mechanisms to partake low price tariffs is motivating consumers to employ ingenious approaches to avail of lower tariffs. Launch of mobile number portability (MNP) in the near future will hopefully address this unsatiated consumer demand,” Ascentius Consulting principal analyst Alok Shende told ET.

Where do you get this? Your local phone recharge outlet, for anywhere between Rs 50 to Rs 200, depending on the handset model. One such product, photographed, is called the Yutong Doublecard, which comes with “six months of guarantee”.

“We source it from bulk dealers, who in turn procure it from Chinese manufacturers,” says a Kanpur-based online retailer Gyan Chand who has sold thousands of units in the past few months. Payment can be made online, or by depositing money into any State Bank of India branch.

Indian mobile phone customers are a pampered lot with probably the lowest tariff in the world as Japan’s NTT DoCoMo and Norway’s Telenor seek to establish themselves in the world’s fastest-growing market which has over 517 million subscribers. Established companies may not be comfortable with number portability as customers could switch to new service providers where tariff is low and the network is not congested, analysts say.

“This is incrementally negative for the Indian telecom operators as they compete with each other on pricing to garner a higher share of MoU per subscriber using multiple SIMs,” Macquarie Equities Research analyst Shubham Majumder said.

Mobile phone service providers such as Bharti Airtel and Reliance Communications, the worst performers in the benchmark index last year, may see their profitability erode further as customers switch. Many analysts, including HSBC Securities and Capital Markets’ Rajiv Sharma and Kotak Institutional Equities’ Kawaljeet Saluja, have a sell rating on the sector.

“People will decide on using one sim or two sims depending on their requirements, quality of network coverage and customer service. MNP must be implemented across the country in one go to become relevant,” Cellular Operators Association of India’s officiating director general TR Dua said.

According to industry estimates, 20% of the existing mobile user base is using more than one sim. “Moreover, given the rising competitive intensity, the phenomenon will only gain momentum going forward,” HSBC’s Sharma said in a report.

The device offers up to 25% margin for retailers. “Our channel checks suggest that 40% of incremental industry sim additions are due to multi sim usage by subscribers,” said Macquarie’s Majumdar.

But the industry is not worried over it. “We continue to be the sole or primary sim for users. Consumer has choices and will exercise. In the markets we are strong in, we are less impacted by the dual sim phenomenon,” said Idea Cellular chief marketing officer Pradeep Shrivastava.

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January 15, 2010 - Posted by | Uncategorized |

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