Common-use mobile number proposal rejected-trc

Sri Lanka's telecommunications regulator has ruled out the implementation of the Mobile phone Number Portability (MNP) which would have allowed subscribers to switch networks while using the same number.

The proposal has been rejected due to the huge cost involved (in its implementation). Director General of Telecommunication Regulatory Commission (TRC) Anusha Palpita told the Business Times (BT) that at least US$96 million investment is needed to implement this service with the return on investment very low in a small mobile phone market such as Sri Lanka.

He added that such a huge investment should be made by local mobile telecom operators and it will be more prudent for them to use that money in providing a better service to their customers.

Mr. Palpita warned that if they go ahead with the plan to introduce MNP, local telecom operators would pass the huge cost incurred by them on to customers.

"Severe price competition in the Sri Lankan mobile space has significantly eroded the telecom operators' profitability," he said.

SriLanka Telecom CEO Greg Young told the BT that it is essential to identify a suitable system with affordable cost to implement MNP.

While MNP could force the operators to improve service standards, its implementation could also provoke greater expenses pertaining to loyalty-based rewards, brand-building and product differentiation, he added.

"Furthermore, those operators who currently maintain a premium above-the-floor tariff, on account of greater investments in network capacity and coverage, and prior brand name investments, could be forced to match competitors' lower tariffs, in order to retain market share," he said.

However he noted that MNP is a good development from the subscribers' point of view.

Those who are 'confined to a specific network, simply because they want to keep the same number and not because of specific advantages from that network would be able to switch to a better network if this change is implemented.

Bharti Airtel, the latest entrant to Sri Lanka's mobile sector, has been pushing for number portability.

However a top official of Dialog Axiata, who wished to be anonymous, said that, implementation of MNP could increase subscriber acquisition and retention costs within the industry.

Once a regulatory decision is taken operators may be able to make the necessary changes to their network, he said, adding that if TRC is not going ahead with the plan then there will not be further pressure on the operators' balance sheet.