Saturday, October 06, 2012

“TRAI Can’t Force QOS norms on Operators”

Satyen Gupta, former Principal Advisor, TRAI

Telecom Regulatory Authority of India (TRAI) played a pivotal role in the great Indian telecom success story. The body keeps a close watch on the quality of services offered by the telecom operators to millions of wireless subscriber. However, there is little that the regulator can do when it comes to implementation of these norms on the ground level. Former Principal Advisor to TRAI Satyen Gupta spoke to Akhilesh Shukla about the MNP and regulators role in implementation of QoS norms.

B&E: The churn rate in India is very high, especially in the prepaid segment. Do you think MNP would be able to further escalate the churn rate?
Satyen Gupta (SG): Truly speaking, MNP would not have a major impact on the churn rate in the telecom space. The little churn that we could see would be on the front of high value postpaid subscribers. Most of them are corporate executives or business class people, who need to be connected 24x7. These people need quality service. They have all the reasons to port if they are dissatisfied with the existing service provider. The service provider has to make investments to retain them; otherwise they will see a decrease in top line.

B&E: How would the implementation of MNP impact the service providers?
SG: The marketing budget of telecom operators would significantly go up after the roll out of MNP across the country. The operators have to communicate and educate subscribers about its USP at regular intervals to remain competitive. Investment has to be made on the front of improvement and maintenance of QoS. At the same time, they have invest in retention of dissatisfied subscribers, especially high ARPU ones.

B&E: 3G and MNP were expected in India for quite a long time. Do you think the delay had any negative impact on the sector?
SG: The delay of both the services did not have much impact on the Indian telecom sector. Both the services were present in one form or the other. People looking for high speed connection while on move have already subscribed to EDGE services (2.75 G) for the handset. Similarly, high speed data cards, offered by the CDMA operators, have fulfilled the need for faster internet on mobile platform. Similarly, the dual SIM phones have bridged the gap for subscribers looking for a new operator while retaining the existing number.


Source : IIPM Editorial, 2012.

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posted by Editorial at 5:40 PM

Friday, July 20, 2012

Improve The Scenario in The Insurance Sector

Amidst Challenges of Standardisation, Will Health Insurance portability, which is Scheduled to be Implemented from July 1 This Year, Improve The Scenario in The Insurance Sector.

It needs to be seen now as to why a customer would change the company – for better services or for lower premiums. Given the rise in claims (the incurred claim ratio of health was 111.13% in 2009-10 as against 105.95% in 2008-09), demand for higher level of health cover and medical inflation (proposed 5% service tax will further impact health insurance premiums), health insurance is definitely a bleeding portfolio. In such a scenario, a war based on lower premiums could be an altogether unlikely case. Nonetheless, overcharging and variations in rates of premium would be reduced.

So when you consider the transformative impact of this judgement, it could really make the industry more competitive and transparent. Players will be encouraged to ensure constant innovation & improvement in efficiency standards and services. When TRAI introduced it in the telecom sector on January 20 this year, a lot of migration of customers has been observed from one telecom service provider to the other (statistics from the Department of Telecommunication reveal that by the end of February 2011, Reliance Communication’s net loss of subscribers was pegged at 0.3 million while Vodafone’s net gain of subscribers was pegged at 0.19 million).

Whether or not the portability scheme in the health insurance domain will lead to a similar mass migration is even yet to be seen. Moreover, customer disatisfaction is strongly linked to those few (thankfully!) moments when the cover is actually needed. But portability will surely encourage more people to opt for health insurance for themselves and their families, as it reduces the potential consequences of choosing a wrong insurer. If statistics are to be believed, only 2% of Indians currently have health insurance, which constitutes about 20% of the overall insurance business in the country. However, a major concern for the insurance companies is the lack of an effective data-sharing mechanism with respect to policy holders.

Also, for effective portability, a standardised system and platform integration needs to be introduced. The guideline also does not clearly specify the extent of past transactional information to be shared by the policy holder, and this could prove to be an impediment. The rule may be a blessing where migration affects serviceability. But until proper policies, procedures and implementation mechanisms are in place, it may not move far beyond being a psychological bargaining chip.



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posted by Editorial at 5:56 PM