Tuesday, January 25, 2011

Want a free pizza? Threaten to switch mobile operator

The introduction of the mobile number portability (MNP) has prompted telecom operators to come up with innovative ways to retain customers. As if dirt-cheap call rates were not enough, operators are now treating subscribers to free pizzas as well.
Some of Bharti Airtel’s 145 million-odd subscribers were in for a pleasant surprise. Their threat to jump ship following the recent nationwide launch of MNP resulted in them getting pizza vouchers. Other service providers are also pulling out all stops — offering free talk time, discounts and customised data plans to retain customers.
Several subscribers chose Twitter to narrate their stories. “Airtel sends me a pizza voucher as a gift. First such freebie I’ve received from Airtel in six years I’ve used their service. MNP jitters?,” Bangalore’s Ashwin Prabhu tweeted on January 20, when MNP was launched by prime minister Manmohan Singh. “Airtel offers me a free pizza for being a loyal customer on fixed line. This on a day when MNP goes live,” tweeted Praveen Garlapati.
“We regularly offer delight programmes to our customers, MNP or otherwise. We are not offering any special plans for MNP,” Poonam Nikam, Bharti Airtel spokesperson, said.
A Vodafone spokesperson said, “We are not offering anything at this point of time.” However, Xylene from Bangalore wrote on Twitter on January 21, “Update Day 1: Vodafone called me and offered Rs99 VMC — Vodafone Mobile Connect — which they were previously offering for Rs299.”
Aggressive efforts by telecom operators to woo rival customers as well as retain their high-value customers seems to be the next chapter in a hyper-competitive telecom market in India. There are 10-12 operators per circle in the country.
From the perspective of competition, analysts tend to group telecom operators into old players or incumbents, including Bharti Airtel, Vodafone and Idea and BSNL — and the so-called new entrants or challengers, including Uninor, Videocon, MTS and Etisalat.
Telecom sector analysts Rohit Chordia and Vineet Thodge of Kotak Institutaional Equities say the ‘carrot and carrot’ policy being used by incumbent operators has the potential to backfire. “We are surprised at the subscriber retention moves of the large incumbents post MNP launch,” Chordia and Thodge wrote in a note on January 21. “Put yourself in the shoes of a loyal customer with no intention to switch from her existing operator - she sees her mobile operator trying to woo new subscribers with attractive‘port in’ offers, and offering freebies to (some) fellow customers showing their intent to ‘portout’. Isn’t it natural for her to question the benefit of her loyalty?”
Loyal customers who have not been offered freebies may feel left out and hence, decide to port out, even if they are happy with their service provider. Even if the customer churn settles after a period of time, the MNP-related behaviour being seen now will likely have a long-lasting effect and financial impact as well, the analysts said.source

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