Cut-throat competition: After customers, now dealers make most of telecom rivalry

By: |
October 25, 2020 2:15 AM

Vodafone Idea is also offering the same set of incentives to the dealers. In some circles, Vodafone Idea is giving dealers refunds equal to two months recharge amount.

Since subscriber additions and recharges slowed in the past few months and competition in the market also increased, operators have started giving additional incentives to dealers to onboard customers.Since subscriber additions and recharges slowed in the past few months and competition in the market also increased, operators have started giving additional incentives to dealers to onboard customers.

The competition in the mobile market is getting cut-throat, with operators now offering higher commissions to dealers who retail recharge vouchers as well as new connections.

The industry practice has been to offer commission of 4%-6% of the recharge amount or new connections sold. This way on an average a dealer makes around `50-80 per new connections/recharge.

Since subscriber additions and recharges slowed in the past few months and competition in the market also increased, operators have started giving additional incentives to dealers to onboard customers.

For instance, a dealer in UP said Bharti Airtel is offering full amount of the recharge value or new connection if the plan is for Rs 219. The dealer also said they are being offered a VIP number free of cost when they complete 10 mobile number portability (MNP) — which means making a customer switch to its network from that of a rival’s. The VIP numbers can be sold by the dealers anywhere between Rs 3,000 and Rs 5,000.

Vodafone Idea is also offering the same set of incentives to the dealers. In some circles, Vodafone Idea is giving dealers refunds equal to two months recharge amount.

The company is also offering cashbacks to customers in case they opt to join their network. The incentives and cashbacks vary with telecom circles. Vodafone Idea has already decided to concentrate on circles where it has strong network and good market share.

A query sent to Bharti Airtel regarding the dealer margins remained unanswered while Vodafone Idea said its incentives and commissions are in line with the industry practice.

Many dealers also said that Reliance Jio has so far not revised its commission policy. Sources in the company told Financial Express that they are closely watching the developments in the industry and any call around dealer commission will be taken at an appropriate time. The company did not answer a query asking if it has increased the commission for dealers.

As a result of such aggressive sales practices, MNP requests increased to 7.53 million in July, the highest seen since March 2018.

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