11 April 2011

The great Indian mobile pack activation scam can be worth over 450 crores! [UPDATED]



[UPDATE]
As per TRAI's latest directive, the operator now needs to obtain confirmation from the consumer via SMS/e-mail/fax/in writing within 24 hours of activation of the VAS service and charge the consumer only if the confirmation is received. Further, every service provider shall, at least three days before the due date of renewal of a subscribed VAS, inform the consumer through SMS.
This new guideline will provide huge relief to customers plagued by unsolicited activation of VAS.

The timing of this ad was very coincidental. Just days before it was aired, my mom found out that the secret behind her disappearing mobile balance was a World Cup Live Alert pack, Mitti Ke Rang Stand Alone Night Plan and an Airtel advantage trial pack. Needless to mention, none of these were solicited.The culprit in this case - Airtel.

And she is not alone, and Airtel is not the only player in this game. The script remains the same - scan and pick unsuspecting low-worth prepaid customers with positive balance on the network,  pick a random mobile pack, activate and take cash in bank! How much cash you say - to the tune of 450 crores annually  if you do a quick back of the envelope math (Assuming 5% of active prepaid subscribers which is ~500 million, are subscribed to a plan worth Rs.15 on a monthly basis) 

Its baffling to see mobile operators in India stooping to such levels to save their diving ARPUs. Even more so to see fellow Product Managers giving the go ahead in a bid to glorify their 'content-free' and down-rightly stupid packs and services.While these players continue to spend research dollars on understanding the changing digital consumers, their executives never failing to preach the clear, simple user-centric focus of folks like Apple in umpteen conferences and keynotes, I fail to see reason in why they continue to mint the long tail by such deceitful methods.

Tata Docomo strikes the nail on its head with this 'Keep it Simple' messaging. As the Indian telecom landscape gets more and more competitive, players need to innovate with new services and value propositions, rather than assuming such black hat methods. Add Mobile Number Portability to the mix now and users would not think twice in changing operators when fraud is detected.

Like I will now. So long Airtel - you just lost a customer in my mom. I know you still have a 100 million others, but if smaller players like Docomo continue to innovate, you will soon fall on the equator.

Had a similar experience with other operators or have a different side of the story? Do drop a note below.

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