Telecom - MNP unlikely to be game-changer - Motilal Oswal

TELECOM: MNP gaining some momentum but still insignificant at 0.5% of subscriber base; unlikely to be game-changer

Cumulative porting requests have more than doubled as of February 28th v/s February 15th.

3.8m subscribers (0.5% of wireless subscriber base) have requested for porting up to 28th Feb-11.

Assuming post-paid ARPU is 5x pre-paid, 0.5% subscriber churn can result in no more than 1.5% revenue churn even if half of the subscribers are post-paid.

While there have been media reports citing complaints, requests are being rejected due to non-fulfillment of required conditions or errors.

International experience suggests that response to MNP is crucial over the first six months after which the market churn levels largely normalize. 3G launch could potentially be a major factor for MNP uptake as 1) operator focus is currently higher on 3G rollout/launches and 2) high-end subscribers could be awaiting 3G rollouts before deciding to port. In key metros only three private and one public operator have 3G spectrum.

Source : Equity Bulls

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