To Study the Impact of The MOBILE NUMBER PORTABILITY SYSTEM


LITERATURE REVIEW
Without number portability a subscriber who wants to change his network operator has to give up his mobile number. This is a classical example of switching cost in tele-communications. Costs can be defined as real or perceived costs that are incurred when changing supplier but which are not incurred by remaining with the current supplier. Switching costs is a widely spread phenomenon which fundamentally changes the way in which firms behave and markets operate. The existence of such costs leads to economies of scale in repeat purchasing, because a customer who has previously bought from one firm incurs extra cost in purchasing an otherwise identical product from a new firm, even if that product is sold at the same unit price. As a consequence, in markets
with consumer switching costs demand is less elastic and consumers have limited incentives to migrate to cheaper offers which dampens competition.

In telecommunications lack of mobile number portability is not the only instance of consumer switching costs. The impact of switching costs on market competition has been analyzed by many researchers. Surely one of the most important contributions have been made by Klemperer. He discusses the impact of switching costs on prices, market shares, profits and entry deterrence. The fundamental way in which switching costs change firms’ behavior is that each supplier with an installed base of customers will have interest in exploiting his customers, because they are locked-in by previous purchase. This motivation, especially in case of no price discrimination, will cause a weak interest in competing for rivals’ or new customers.
Another consequence of switching costs and lock-in mechanism is that for each supplier market share is a fundamental goal of business strategy. Firms will invest in future market shares, since installed customer base is valuable for them. In the dynamic market perspective, when firms first compete for new customers who later on face switching costs of changing supplier, prices are lower in the beginning and higher in later periods of competition as compared to identical market with no switching costs. This is known as bargain then rip-off pricing. Although in this pricing pattern low prices for new customers are followed by high prices for locked-in customers, but average market prices and profits are still higher than in the absence of switching costs.

Mobile Number Portability: The effect of MNP introduction should be consistent with lowering switching costs. The main expectation is that average market prices should fall down. A price decrease will affect not only old mobile subscribers but also new customers and this should positively affect adoption rate. This is however only true if new consumers have rational expectations. Naive customers do not see the relation between lower prices today and higher prices tomorrow, so that reduction of switching costs would actually discourage them from buying today because of less attractive promotional offers (weaker ’bargain’ part of pricing strategy).
There are several types of benefits from MNP introduction. In case of business subscribers keeping their number allows to avoid cost of informing clients; cost of updating advertisements, business cards, cars repainting; cost of losing and substituting part of business contacts. On average 10 percent of clients are lost and cost of substituting one client was estimated for small and medium enterprisers. Although the results of cost benefit analysis for market were estimated positive, MNP has not to be always welfare enhancing, as Buehler. They identify different types of beneficiaries of MNP introduction and point out on the negative consequences of this functionality on fixed-to-mobile termination charges resulting from network identification problem. The last part of literature includes few empirical studies of the impact of MNP on price competition.

RESEARCH OBJECTIVE

Why the customer is switching from one service provider to the other service provider?
To analyze factors Influencing consumer perception to change their service provider.


Research methodology

RESEARCH DESIGN:
Convenience Research design

SOURCES OF DATA COLLECTION:
Primary Data: Survey
Secondary Data: Journals, Websites and Research Papers.
Research Instrument: Questionnaire.

SAMPLING PLAN
Sample Size : A sample size of 100 respondents I will take for the study.
Sampling Method: Non-Probability/Convenience sampling method will use for the study