Pre-paid India, post-paid US a world apart

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India and the United States are poles apart in the way mobile phone portability, phone providers and government regulations work, according to a new report by a distinguished academician, but the learned professor never imagined that an ordinary young man in India could get a cell phone with the name and photo of the US President, Barack Obama.

Authored by Dr. W. Bruce Allen, Professor of Business and Public Policy at the Wharton School at the University of Pennsylvania, and a visiting professor at the Indian School of Business, in the white paper released by Neustar, the United States’ Local Number Portability (LNP) Administrator found pre-paid is the choice in India, while post-paid is the norm in the US.

Asked to comment on the differences in the two large democracies highlighted in the white paper, “India’s Experience with Mobile Number Portability,” Dr. Priyanka Matanhelia, lecturer at Johns Hopkins University, told India America Today, “The reason why people prefer to buy a prepaid mobile number in India is probably because it’s much easier and cheaper to buy than post paid.

For example, just a couple of days ago I was reading news from India about a 21-year-old man from Andhra Pradesh (a southern Indian state) who used US President Barack Obama’s picture on a driving license to buy a mobile phone service. Also unlike the US, your mobile phone number is not tied to the social security number so if you don’t want to be traceable, it is probably easier to buy a pre-paid.”

Noting that the costs remain the same across the larger US, Matanhelia said, “You might have a Maryland number, but the cost remains same even if you use it in California. But in India, the cost of using a particular mobile number changes when you travel across states.”

“So if you are moving from one state to another because of your job you might not want to keep the same mobile number unless the cost of using that number will be similar,” she explained.     

In addition to a clear choice of prepaid services in India versus post-paid in the US, the paper noted the dominance of 2G services in India compared to the advancements in 3G and 4G in the US.

With Indian customers switching providers at a higher rate, the paper said there was a predominant use of wireless handsets that support multiple carriers in India, as compared to the US where services and devices are generally bundled together.

Explaining the Indian market, Dr. Matanhelia said, “It is true that average consumer in India carries at least two or multiple SIM cards on a single mobile phone and prefers a prepaid mobile.”

Adding a personal observation, she said, “In fact, on my last visit to India, I was very surprised to learn that the cab driver who drove me from the airport had two SIM cards in his phone.”

Agreeing with the conclusions of the paper, Matanhelia said, “An average consumer in India will only be interested in carrying over the same mobile number if the number is useful for them in future. Since the cost of maintaining a mobile number is so cheap, most consumers keep a minimum balance to maintain a number if they have any use for it before discarding it completely.”

With the paper concluding that, “regulators and service providers should rely solely on the characteristics of their respective markets when making decisions regarding number portability in the future,” Steve Edwards, senior vice president of Carrier Services at Neustar said, “As regulators and others review lessons learned from other countries’ portability systems, it is important to keep in mind the differences in telecommunications markets around the world, particularly when comparing the United States’ reliable and tested number portability system and the younger, sometimes unconventional portability systems of other nations.” (IATNS)

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