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Low mobile number portability (MNP) charge to increase churn rate; negative for mobile operators. 

The latest notification by the Telecom Regulatory Authority of India (TRAI) caps the porting charge at Rs19 for mobile number portability (MNP); It is believed that low porting charge would lead to higher porting volumes and thus would increase the churn rate in the sector, further intensifying the competition amongst the operators. This would be negative for the GSM operators (Bharti Airtel, Vodafone, Idea Cellular) as these operators stand the risk of losing the high revenue, high-margin post-paid subscribers. It is expected from operators to spend more time and resource in retaining customers, advertising aggressively and enhancing their service quality. With these expenses expected to come into play, the dilution of the earnings before interest, tax, depreciation and amortisation (EBITDA) margin could not be ruled out. 

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