Dialling for freebies

Two weeks ago, Mumbai journalist Harish Shah (name changed) got a call on his cellular phone "� would he be interested in switching from Bharti Tele-Ventures to Hutchison-Essar? At the other end of the line was a Hutchison direct sales agent (DSA).

For the next few months, Shah would not have to pay rentals for three months, would get 100 SMS free for the next six months and free roaming in western India for two months "� apart from a 10 per cent discount on the total bill for three months. He'd have to put down a Rs 300 deposit, refundable after three months.

Shah, of course, was delighted and is considering switching operators. He's done so twice in the last one year and may well decide to move to a new service provider once the freebie period ends.

Shah, of course, is not the only post-paid subscriber who's thinking of switching or have shifted to other mobile service companies. In Mumbai, several subscribers have been inundated with calls from the DSAs of Bharti-Televentures urging them to switch to them.

In Delhi, marketing man Rakesh Chaddha (name changed) got a call from a mobile service company urging him to switch from Bharti-Televentures. Chaddha (whose monthly bill runs to Rs 8,000-Rs 10,000) replied that he would shift "� if he was given a top end handset. He was offered a Nokia 6610 and so he switched. Indeed, smart subscribers can negotiate and further bring down call rates "� one operator has a scheme where the rentals are negotiable.

If mobile service companies have been trying to poach post-paid subscribers who pay fat monthly bills, that's because they have realised that the post paid user spends more than the pre paid user, whom they had been targeting earlier. The average revenue per pre-paid user (ARPU) is close to Rs 350, versus upward of Rs 1,200 for post-paid ones.

Also, last year, code division multiple access service companies (Tata Teleservices and Reliance Infocomm) focused on pre-paid customers when they launched pre-paid vouchers and so on. So GSM service companies focused on post-paid customers.

No mobile service company is willing to confirm that it is trying to poach subscribers from competitors. A senior Hutchison Essar executive flatly denied that the company is trying to poach subscribers from its rivals.

"Why would one encourage such things when tele-density is just 4-5 per cent and there's a lot of scope to increase the subscriber base?"

He also added that Hutchison subscribers had complained that they had been receiving unsolicited calls from competing service companies. He added that unscrupulous direct sales agents may have been calling subscribers. The Bharti Tele-Ventures spokesman did not respond to a phone call and to a message left on his voice mail.

True, the initial offers for freebies came from DSAs, who were passing on a part of their commission to the customer by offering a free SIM card or a free add on card.

But more recently, mobile service companies have directly or indirectly joined the game. For DSAs can't offer rebates on roaming and STD rates without the sanction of mobile service companies.

Nonetheless, it's beginning to dawn on most mobile service companies that the subscribers they poach won't stick to them for long.

Says a senior BPL executive: "We realised six months ago that there is no point in the numbers game and decided not to offer schemes that hold good for one or two months as it is a vicious cycle."

He argues that mobile service companies that offer such schemes will see a surge in subscriber numbers only in the short run.

"Once the freebies are exhausted, these subscribers are on the look out for a new service provider," he says. Moreover, the initial cost of acquisition is high.

Nonetheless, the poaching won't stop. "This is a war for marketshare and even 25 paise counts," as one executive at a mobile service company confesses. So if you're willing to change your mobile number ever so often and want lower bills, continue switching operators. l

Additional reporting by Nimesh Shah