The Effects of Mobile Number Portability on Marketing in Telecom Sector

Abstract

The telecom sector is the fastest growing sector in Pakistan. At present there are six cellular service providers in the country, namely Mobilink, Ufone, Telenor, Warid, Paktel and Instaphone. Out of these six companies four hold the major chunk of the market with I'1obilink by and far the market leader follo\ved by Ufone. Telenor and Warid also have a significant presence in the market. For a couple of years a price war has been raging in the telecom sector, with each company trying to out do the other in . terms of price and value for money they are offering. This has led many consumers to own multiple connections. The Pakistan Telecom Authority (PTA) recently launched I'1obile Number Portability (MNP) for the benefit of consumers owning multiple connections. Due to MNP the consumers can switch networks while keeping their original number. This was supposed to be a big step in ensuring fair and proper competition in the market, especially benefiting the rising number of cell phone owners in Pakistan and the nevI companies thinking about entering the market. MNP was supposed to give these companies a safe environment to compete in. Against all proj ections this step has turned out to be a big failure in terms of acceptance from the consumers. It was predicted that Mobilink would be the biggest loser because of MNP as people who were unwilling to switch because of losing their old number would look to other telecom companies to give them the services and prices that I'1obilink was not. But no such thing happened. The biggest reason given for this by experts is lack of awareness among the consumers. Many consumers don't even know whether this facility exists or not as none of the companies (except Ufone and Paktel) have advertised about MNP. Another reason is that companies don't want to spend promoting something which they know won't be giving them such huge benefits compared to the cost associated with it. This report also attempts to find out the impact on marketing in the telecom sector with the introduction of ~1obile Number Portability. Now that the consumers have a choice of switching networks while keeping their old numbers it has become a concern for all networks to retain their customers while improving their services to such a degree that their current consumers stay satisfied. MNP is prevalent in many other countries like the USA, the UK, Finland and the Netherlands. This report takes a look at ~1NP in these countries as well and tries to find the reasons for its failure there and in Pakistan as well.