Competition set to intensify as interim telecom minister declares operators ready to roll out number portability. India Thursday started mobile number portability services in a northern state to allow users to change their operators without changing their cellphone numbers, and said the service will be introduced nationwide on Jan. 20.
The launch of the new service will likely intensify competition in the world's fastest-growing telecommunications market by subscriber additions, and may prompt operators to further reduce call tariffs, which are already among the lowest in the world, to retain users.
Kapil Sibal, the interim telecom minister, said after launching the service in Haryana state that all operators are now ready to provide this service and their networks in the remaining 21 telecom service areas have started migration to the number portability system.
The launch of the service was deferred thrice as some telecom operators weren't ready with their networks to provide the service.
Telecom Secretary R. Chandrashekhar said number portability will increase competition among operators in terms of tariffs and service quality.
India adds more than 15 million wireless subscribers a month and is the second-largest market after China for wireless services with more than 670 million users. The fast pace of growth has led to an intense price war, with new companies launching aggressive offers to attract subscribers and existing players lowering tariffs to retain users. That has pushed tariffs as low as INR0.10 a minute for some plans.
Sanjay Kasturia, chief executive of Syniverse Technologies India Pvt. Ltd., the company which has the license to provide number portability services in 11 of India's 22 telecom service areas, said he expects 2%-3% of users to change operators in the next 12 months.
Separately, Secretary Chandrashekhar said that the telecom department hasn't yet issued notices to any operator seeking a fee toward availing excess bandwidth.
Late Wednesday, the Financial Times newspaper, citing two senior government officials, said India's Bharti Airtel Ltd.(532454.BY), state-owned Bharat Sanchar Nigam Ltd. and Vodafone Group PLC (VOD) unit Vodafone Essar Ltd. could be forced to pay more than $1 billion each to the government as fines for receiving excess bandwidth.
This came after an audit determined that the telecom ministry in 2008 allotted bandwidth for second-generation mobile licenses to the three operators beyond the contracted limit without charging any fees upfront.
The scandal over the license and bandwidth allotment led to the resignation of Andimuthu Raja as telecom minister earlier this month. The government later appointed Sibal as the interim telecom minister.
In May, the telecom regulator had suggested charging a one-time fee from companies which hold excess bandwidth for 2G services and that this fee should be linked to 3G spectrum. The move was opposed by most operators, including Bharti and Vodafone Essar.
Thursday, the regulator also said it will bring out rules on spam calls and text messages in the next few days.
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