The Telecom Ministry of the Government of India made two major policy announcements on Monday: one on number portability and the other on 3G spectrum. These policies will provide a major boost to the already booming mobile communication industry by enhancing customer benefits. The number portability, allowed for Delhi, Mumbai, Kolkata and Chennai circles to begin with, will be major bonanza for 3.75 crore mobile subscribers because users now will be able to move from one service operator to another without changing their numbers.

Since most users do not like to change their mobile number to avoid informing all contacts about the new number, people do not change their service operators even if they are unhappy about the service. Number portability will allow users to retain their number while changing the service operator or shifting base from one circle to another. Sloppy service operators will now have to pull up their socks, or  users will move to better providers.

There is a strong possibility that rate plans will become more competitive and operators will offer new value added services to attract customers. In the free-for-all battle weaker and small operators will lose the most and will ultimately sell out to bigger players.

The government's other decision to offer licences for 3G (3rd generation) spectrum is also a welcome move. 3G services provide much higher speed to mobile devices and are ideal for data, music and video downloads from the internet. This spectrum will also lead to convergence of computers into smart mobile phones.

It is already happening in many developed countries which started 3G service a few years ago and India will now join the club. The decision to offer 3G licence through auction of spectrum based on bids from existing and new players is also welcome. This will not only get the government a minimum of Rs 2800 crore for each all-India bid (based on minimum bid price) but will make only serious players enter the fray. Since spectrum is scarce, all players – old or new – should have equal opportunity to bid for it, creating transparency and equity in the entire process.

To make sure that after bagging the spectrum a bidder does not sell its licence for a profit, the guideline has barred merger of licensee company for the next five years and banned trading in spectrum. The next step is to quickly implement the new initiatives to usher in a new era in the communication sector.