Telecom companies stop user poaching as stability returns to industry

Telecom companies stop user poaching as stability returns to the industry

Mobile phone customers may have felt some relief in the last few months, stopped calling on frequent calls from rival operators and asked them to change loyalty. 

This is because India's old telescope - Vodafone Idea and Bharti Airtel have blocked their illegal activities, in the sense that the industry can return to stability with the three carriers - the revenue near the third most recent entry-level Reliance Jio And each other in terms of customer market share.

Industry executives and analysts said that its aim is to protect turf and reduce churn, which will help in reducing operational acquisition costs, which will help in operating margins.

They said, "We have stopped calling Pesky on the basis of daily offers via auto-dialer, or competition for today only.

 Balesh Sharma, CEO of Vodafone Idea, India's largest telecom operator, said that in three big players, who are almost equal, if I do this (call the customers of the rivals), then someone else is going to do the same. , Told ET.

"It's going to stabilize the revenue, or the cost, or whatever method you want to see it," he said.

According to a senior executive of the industry, Bharti Airtel has also stopped offering customers daily offers. Number two Telco did not answer ET's questions on this matter.

"Consumers in the telecommunications industry are a major concern for the churning operators. In some instances, approximately 30% of an operator's customer can change in one year. 

It imposes a significant cost on an operator, "said Rajan Mathews, Director General of the Cellar Operators Association of India (COAI), that the industry body representing the private players

Mathews said, "It takes 1,500 rupees for a new customer, and loss of revenue is lost three times on the customer's loss."

While operators can brainstorm with the short-term temptation to switch customers, COAI says that this form of induction can be avoided. Matthews said, "It increases costs."

Rajeev Sharma, the co-head of research at SBIICAP Securities, warned that if any of the three telescopes of the private sector are to change the tariff, then this approach can be short-lived.

However, he said that this step is the financial sense for India's old telecom, which is already under serious financial pressure.

"When there is a prevalence of poaching, then gross increment in customers increases for the industry and the churn increases. Like, the sales distribution cost increases, which accelerates the margin pressure for the operator," he said.

Analysts said that in a price sensitive market, customers were easy to subdue with daily offers, but now with profitability, operators have decided to plug in or reduce such illegal efforts.

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"Before that, the telco could get some subscribers from daily calling, especially in rural markets, and prepaid customers could be sent by aggressive offers. An acquisition cost and if the new customer has not renewed its tariff plans, the effort is ruined, "one partner said working with one of the biggest analyst firms.

"Operators have realized that the race below had to be stopped and this was such a way," said the analyst.

Vodafone Idea has 409.37 million subscribers till the end of February, while Bharti Airtel has 340.31 million customers in the second place. There are approximately 307 million customers in the form of the latest entry-to-Reliance Jio March, which is rapidly reducing the gap with its old rivals. The shares of their revenue market are also close to each other with the leader of Vodafone Idea, and Bharti Airtel and Jio.

Jio did not answer ET's questions by press-time.

Another factor which could have prevented Vodafone from taking this daily call is that there has been no increase in tariff among the three players in the last 16 months. "... we are trying to do stuff in the market. In the last 16 months, according to Headline Tariff, no price has come down, "Sharma told ET.