REDUCING THE LEVEL OF SWITCHING COST IN MOBILE COMMUNICATION:THE CASE OF MOBILE NUMBER PORTABILITY

WHAT IS MOBILE NUMBER

PORTABILITY IMPLEMENTATION OF MOBILE NUMBER PORTABILITY PORTABILITY SCHEMES MEASURMENT OF SWITCHING COST &INTERPRETATIONS FROM THEM. ADVANTAGES OF MOBILE NUMBER PORTABILITY

SWITCHING COSTS AFFECT THE MOBILE MARKET

COMPETITION. SWITCHING COSTS REDUCE THE SERVICE QUALITY AND CUSTOMER WELFARE. POLICIES WERE DESIGNED TO REDUCE THE SWITCHING COSTS. MOBILE NUMBER PORTABILITY IS AN EFFICIENT METHOD OF REDUCING SWITCHING COSTS.

ENABLES THE USER TO RETAIN THE MOBILE NUMBER WHEN CHANGING FROM ONE NETWORK TO OTHER . THE TELEPHONE NUMBERS NO MORE IDENTIFY THE NETWORKS.
IN INDIA TRAI AND DOT ARE RESPONSIBLE FOR IMPLEMENTING SUCH POLICIES. DEC 2009 IS THE DEADLINE FOR OPERATORS IN INDIA FOR IMPLEMENTING MNP.

EXAMPLE OF MOBILE NUMBER PORTABILITY

PRESENT MOBILE NUMBER OF MR XYZ

9778579614

PRESENT

RELIANCE

NEW

VODAFONE
NEW

DOCOMO

WSP(WIRELESS SERVICE PROVIDER) HAVE TO BUILD THEIR NETWORK FOR BOTH CALL DELIVERY AND PORTING PROCESS . TRIGGERING MECHANISMS ARE USED FOR QUERYING CAPABILITIES . SOA(SERVICE ORDER ADMINISTRATION) IS USED FOR PORTING IN AND PORTING OUT THE NUMBERS MSC PROCESSES A CALL DESTINED TO A PORTED NUMBER

ALL CALL QUERY (ACQ)

QUERY ON RELEASE(QOR) CALL DRAWBACK ONWARD ROUTING

ORIGINATING NETWORK

RECEIPENT NETWORK

CENTRAL DATABASE

THE OPERATOR THAT ORIGINATES THE CALL ALWAYS CHECKS A CENTRAL DATABASE AND OBTAINS THE ROUTE TO THE CALL

DATABASE

5
3
ORIGINATING NETWORK

RECIPIENT NETWORK

1 2

DONOR NETWORK

THE ORIGINATING OPERATOR FIRST CHECKS WITH THE DONOR OPEARTOR. DONOR VERIFIES THE CALL AND INFORMS THAT IT NO LONGER POSSESSES THE NUMBER THE OPERATOR THAT ORIGINATES THE CALL THEN CHECKS THE DATABASE ,AS IT IS DONE WITH ACQ

ORIGINATING NETWORK

RECIPIENT NETWORK

4 2
INTERNAL DATABASE

DONOR NETWORK

3
THE ORIGINATING NETWORK FIRST CHECKS WITH THE DONOR OPERATOR. DONOR OPERATOR CHECKS WITH ITS INTERNAL DATABASE AND PROVIDES A NEW ROUTE ORIGINATING NETWORK USES THIS ROUTE TO FORWARD THE CALL NO CENTRAL DATABASE IS USED

ORIGINATING NETWORK

RECIPIENTS NETWORK

4 1 2
DONOR NETWORK INTERNAL DATABASE

THE ORIGINATING NETWORK CHECKS THE CALL WITH THE DONOR NETWORK DONOR CHECKS WITH ITS OWN DATABASE AND OBTAINS A NEW ROUTE DONOR OPERATOR ITSELF ROUTES ITSELF THE CALL TO NEW OPERATOR ALSO CALLED INDIRECT ROUTING

DONOR NETWORK PROVIDES THE NUMBER & RECEIVER ACCEPTS THE NUMBER LOCATION REGISTRY EXISTS TO TIE A MOBILE STATION (CELLULAR PHONE) TO A NETWORK RECIPIENT NETWORK PROVIDES A LSR (LOCATION SERVICE REQUEST) TO THE DONOR NETWORK

DONOR NETWORK PROVIDES A FIRM ORDER CONFIRMATIO

EITHER PROVIDER CAN INTIATE THE PORT WHICH WILL EDIT THE NPAC DATABASE

IF NEW PROVIDER INTIATES THE PORT IT IS CALLED PULL

IF OLD PROVIDER INTIATES THE PORT IT IS CALLED PUSH AFTER IT IS PULLED OR PUSHED ,THE NEW PROVIDER MUST ACTIVATE THE NUMBER USING THE LRN OF THE SWITCH SERVING THE CUSTOMER

INVETIGATES THE IMPACT OF MNP ON SWITCHING COST

A HIERARCHICAL LINEAR MODEL IS USED

IN THE FIRST LEVEL A CHOICE MODEL IS USED

IN THE SECOND LEVEL DRIVERS OF THE COST OF SWITCHING ARE CALCULATED

BASED ON THE RANDOM UTILITY THAT A CUSTOMER i OBTAIN FROM SELECTING FIRM j IN PERIOD t IS FORMULATED AS A FUNCTION OF THE ATTRIBUTES WITH THE ALTERNATIVE J

NUMBER PORTABILITY IS THUS INTERPRETED AS THE VARIATION IN THE SWITCHING COST THAT CAN BE ATTRIBUTED TO PORTING NUMBER A POSITIVE NUMBER INDICATES THAT PORTING A NUMBER REDUCES THE SWITCHING COST

FROM THE TABLE WE OBTAINED A POSITIVE NUMBER AND THUS PORTING A NUMBER REDUCES THE SWITCHING COST

REDUCES THE COST OF SWITCHING BY ENABLING USERS TO KEEP THEIR NUMBERS WHILE THEIR NUMBERS WHILE CHANGING OPERATORS

INCREASES MOBILITY OF CUSTOMERS AND REDUCES INCONVENIENCES OF CHANGING SERVICE PROVIDERS

COMPETITION INCREASES BETWEEN PROVIDERS AND THE QUALITY OF SERVICE INCREASES NEED NOT INFORM PEOPLE IN YOUR CONTACT LIST WHEN YOU CHANGE PROVIDERS

RESULTS REVEAL THAT CUSTOMERS WHO ADOPT NUMBER PORTABILITY HAVE LOWER SWITCHING COST AS COMPARED WITH CUSTOMERS WHO DO NOT ADOPT IT. RESULTS SUGGEST THAT MNP IMPLEMENTATION IS NOT ENOUGH ANF SHOULD BE ACCOMPANIED BY OTHER MEASURES TO REDUCE SWITCHING COSTS. THE LONGER THE CUSTOMER-FIRM RELATIONSHIP HIGHER IS THE PROBABILITY OF MAINTANING THE SAME NUMBER WHEN SWITCHING. OLDER PEOPLE HAVE A LOWER PROBABILITY OF ADOPTING MNP AS COMPARED TO YOUNGER ONES

Ausubel, L.(1991).The failure of competition in the credit

card market. American Economic Review, 81, 5081. Bolton, R.N., Lemon , K.N. ,& Verhoef ,P.C. (2004) .The theoretical under pinnings of customer asset management. Chen, P.Y .,& Hitt ,L.M. (2007) .Information technology and switching costs . www.Sciencedirect.com www.wikipediya.com Maggie Lee, Senior Technical Analyst on Local Number Portability