Telecoms Promotions And Lotteries: Matters Arising

telecommunications promotions

Yesterday, the news broke of the banning of all telecoms operators in the country from running promotions and lotteries by the Nigerian Communications Commission (NCC). Telecoms operators in Nigeria have become notorious for running crazy promos and lottery schemes that one almost begins to wonder if they were issued licences to run casinos or to run telecoms services.

Everywhere you turn, there is one crazy promo or lottery being executed on the telecoms networks. And these promos have contributed in no small measure to the terrible quality of service being experienced on the networks. From the NCC’s directive are key pointers to this. Here:

i. In due regard to the afore-mentioned responsibilities therefore and having observed that these promotions have increased the number of minutes available to subscribers for use within a limited period of time thereby creating congestion in the networks as subscribers try to use up the available minutes within the stipulated time.

iii. That termination of calls were becoming increasingly difficult from one network to another and overall consumer experience on the networks has become very poor thereby making it extremely difficult for subscribers to make calls successfully.

Average revenue Per User Dropping

Make no mistake about it: the emergence of these lotteries and promos springs from one thing – the networks are making less money from each subscriber, and are trying to compel you and I to spend more. That is it in layman’s terms. But rather than offer you services that you really need, they dangle mouthwatering incentives. You know – Win An Airplane; Win a Country; Own The Moon, and other such idiotic concepts.

Of course, the average consumer not being savvy, the networks spin gold from these promos. Everyday, my line is inundated with text messages from Glo enticing me to enter a lottery for a Toyota Yaris, a motorbike or N12 million naira. It is a similar story on my wife’s Airtel line.

Then, we have the less garish promos that offer you double your used airtime per day or per recharge. The intent is the same: to generate more income for the operators without offering you the services that you need.

An Early Warning

As a people, we are an odd mix. We want good things, but we often want them at no cost. I don’t know what to make of that. Good cars cost more. I own a car. It is “good” in the general sense, but I know that if I want a more comfortable or higher performing car, I shall have to spend more both to purchase and to maintain it. Good phones cost more. Even good food costs more. The economics are plain for all to see. But when it comes to telecoms services, we expect rock solid performance for next to nothing. Like I have said many times before, we keep paying for it and we will keep paying for it if things do not change. The telecoms operators are in business and must run profitably. If they find it difficult to do so, they will go burst, and we can all crawl back to our pre-2001 caves.

Perhaps many of us have no idea how really bad things are on ground. I see naively optimistic people on Facebook and Twitter mouthing off about things getting better, and I am not amused. If we want things to get better, we must first acknowledge the gravity of the problem at hand and then make hard choices. Really hard choices. We have watched the banking industry spin and crash. We might just see the same happen in telecoms.

The CDMA guys are effectively dead and buried. Do not be fooled in thinking that all is well and that it will never happen on the GSM front. We might just be heading for a telecoms ice age.

Stupid Price Wars

I will come back to this, though many subscribers do not want to hear it – many of these promos are all part of the raging price war. In simple terms, rather than compete on value, the telcos are brawling to give the impression that they are offering the lowest tariffs without really offering lower tariffs. But as the NCC rightly stated in the ban statement, these promos and lotteries do more harm then good to the consumer while the telcos smile to the bank. For the consumer, it is a case of being penny wise and pound foolish.

Just yesterday, in the article titled, When EasyBlaze Turns Snail Crawl, I repeated my call for competition based on value. As usual, certain people kicked against it and attempted to twist my words. Someone said, “Your position seems to suggest that broadband ought to be a premium service which is not a good thing.”

Of course, that isn’t what I said, but then everyone is entitled to their opinion of what I say. Paint my position however you will, it is based on common and proven business sense. Any competition based on anything other than value is bound to fail. And cost being commensurate with value is no strange idea. All the GSM telcos currently offer 3G broadband, and all of them fail woefully at delivering the real stuff. What we get is mostly the adulterated thing. If one of them can offer greater value than the others, then it will be able to markup its tariffs to sustain the quality of service. Everyone would still have access to broadband, but at different price points, and at different value points. On the contrary, what all the telcos are doing now is taking the short cut to making money. Subscribers get freebies or near uniform tariffs, but everything is a mess. On every network, calls drop more often, and don’t even go through many times. Internet connections flounder. We waste money. We burn time (something that cannot be restored once gone).

Out of the four operational GSM operators all fighting to entice subscribers with freebies and lower costs, would it really hurt that bad should one of them decide to play different and give the country a real treat? Just one operator shooting for rock solid performance, but with tariffs a little higher than what the competition offers? No; I doubt that it would. And I am certain that there are enough individuals and businesses who need that level of reliability and are willing to pay for it. Then, we would have real competition. Right now, what we have is an open, colourless, shabby, noisy telecoms market with no real differentiation.

Trickle Down Effect

As with all things technology, should real competition based on value take off here, with some operators offering rock solid performance even if at higher costs, eventually those tariffs will drop across board, but with the differentiation still in place. For example, the prices of phones regularly drop after launch, but they don’t all drop to the same points. More feature packed phones will still cost more than bare-bones devices. Better performing devices will generally cost more than lower value ones. That is differentiation. That is competition.

Bread is a staple food. We almost all eat bread. Yet not all bread costs the same. There is “Agege bread” at the lowest level (and I am a fan!), and then there are the branded sliced bread products (which I do not particularly like). For the more exotic, there is Sweet bean Bread, Coconut bread (and these two are favourites of mine), and a long list of other differentiated bread products. My argument is that simple. Broadband is broadband, but there can be differentiation. We get to choose from a variety based on several differing factors.

I will repeat it: it is insanity for all the networks operators to keep doing the same thing and aping one another, and expecting different results. It is certainly more insane of subscribers to expect anything different under the current environment of lack of differentiation.

Parting Shot

The NCC ban is most welcome. These fellows running telecoms networks should go back to focusing on what they were licensed to do. At the moment, I won’t be surprised to find that our telecoms operators have more staff manning their lotteries and promos than network engineers and technical staff. It is a sham. NCC should go beyond just this incidence to make rules that ensure that these sort of promos never see the light of day again. Ever.

In the meantime, dear telecoms operator, stop taking me for a fool. I do not want to win an airplane. I do not want to fly to Dubai. What I do want are telecommunications services that I can use and depend on from day to day. Find a way to deliver those to me or get out of the kitchen.

About Moverick
AKA Mister Mobility. Owned over 100 mobiles. Maverick. Techie. Blogger. Entrepreneur. Agony Aunt. Adventurer. Amateur musician. Ladies man. Follow him on Twitter @Mister_Mobility, on LinkedIn at YomiAdegboye, and circle him on Google+. Listen to his music on SoundCloud.

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17 comments for “Telecoms Promotions And Lotteries: Matters Arising

  1. eye_bee_kay
    November 13, 2012 at 6:25 am

    Great points there!

    And the amusing thing, for me, is that their is no better advertisement than providing high quality service.

    Coca cola can spend trillions on promos; if it is discovered that their product would cause cancer, or it does not give that satisfaction when you drink it, it is a waste of advert funds.

    If Toyota is known to make cars that fall apart like Lada after a few short years, advertising every minute on CNN will not improve sales.

    Therefore, promos or promises of mouth watering freebies from a network that works sporadically would have no effect in wooing people.

    they should just deploy resources to improving the network, rather than splashing money on brand ambassadors and similar ineffective methods.

    I admit it can be a chicken and egg problem. you need more resources to improve the network and attract more customers. But then you need more customers to have more resources from revenues.

    However, an Investor needs to invest more, first, to earn more.

  2. November 13, 2012 at 6:43 am

    Nice write-up and a timely warning. Telecom companies should live up to their responsibilities instead of trying to scam users. EmptyHen is by far the worst culprit. They don’t try similar stuff in their parent country in SouthAfrica! A pity!

  3. November 13, 2012 at 7:05 am

    This particular ban is really a welcome development. Telcos promising you a chance to have dinner with the Queen just by recharging with N500, haba! This stealing by trick should just stop henceforth. How can you expect a subscriber to use a bonus of N3000 in just one day before it expires by midnight? I hope this will bring an end to all this insults from the telecoms operators. I don’t want double of my recharge, just give me quality service and stop all these unsolicited adverts,then I’ll be ok.We are waiting!

  4. Harry Echemco
    November 13, 2012 at 7:44 am

    Win An Airplane; Win a Country; Own The Moon, and other such idiotic concepts.

    Hahahaha. Maybe the next promo would have been: Win a ticket to heaven. I normally don’t bother about most of these promos because they hold little value for me. I did appreciate Etisalat promo around Easter period though, where you are rewarded with instant price of recharge card, pen, canned drink or T-shirt with the purchase of recharge card of N1,000 and above.

    This is a very welcomed development. Let the actual quality of services rendered and the competitiveness of their pricing do the job for them.

  5. emmaedeh
    November 13, 2012 at 8:20 am

    sometimes I wonder what mtn does with all the make, in Dec 2010 the made over 420 billion in profit. this profit has increased year on year, and we still get crappy services.

    Mr mo I don’t believe we have to pay more to get quality service, sometime in 2010-2011 I cam across some info about a body they came to Nigeria to conduct a research on telecoms and they concluded saying that the prices where high and that contrary to belief of many, that prices can be lower and still gsm telecoms would rake in cash

    on the promo side of things, I just ignore them. airtel on the other hand barrages me with more 200 flash messages per day. the day am lucky the bot forgets my line is active and I have a peaceful day.

  6. Noni
    November 13, 2012 at 9:29 am

    These companies make money off of the average person, yet service and quality continues to deteriorate Some of those same people wanting to win a plane in the name of any diety because poverty is not their portion, should be demanding better services from the telcos.

    I’m waiting to see how the telcos will subversive come from another direction. And if the NCC is all that, why don’t they stop the telcos from selling our details to others who keep testing us similar idiotic offers that we haven’t requested?

  7. martinkem
    November 13, 2012 at 10:51 am

    for me i have got grips with MTN with their 5x promo, the congestion is so terrible when u get the bonus airtime, without their bonus my calls go through without any issues but when i get that bonus it becomes a camel andbthe eye of a needle experience to make a call. am so happy it’s been stopped

  8. Harry Echemco
    November 13, 2012 at 11:46 am

    @martinkem:

    for me i have got grips with MTN with their 5x promo, the congestion is so terrible when u get the bonus airtime, without their bonus my calls go through without any issues but when i get that bonus it becomes a camel andbthe eye of a needle experience to make a call. am so happy it’s been stopped

    That’s exactly the experience I had with Etisalat when they introduced their Special Number offer, and I quickly realized that calls to the Special Number is always very poor, meaning that Etisalat probably have a dedicated limited bandwidth for calls on these numbers. I’ve lost interest in these kind of offers ever since then.

  9. eye_bee_kay
    November 13, 2012 at 5:43 pm

    Well, I wonder what I would do with an airplane… http://www.nairaland.com/1101812/port-harcourt-student-wins-mtn-aeroplane

  10. Austine Ezemelue
    November 13, 2012 at 6:17 pm

    If a network is offering better quality of service and decides to charge more, that would be ok with data services. But when it comes to voice services, it’s a different kettle of fish.
    Let’s say telcosA offers very good quality voice service and I subscribe to them not minding the higher tariff they charge me. The quality is ok when I call my friends on telcosA (or they call me). What happens when I call my friends on telcos B, C or D (with crappy voice services)?. I’m subjected to the same terrible voice service I was running from. Everybody cannot afford to be on telcos A.

    Bottom line is that they should increase quality of service.
    Stop all this senseless and ridiculous promotions that cannot be accommodated by the capacity of their networks

  11. micheal
    November 13, 2012 at 10:07 pm

    THANKS MR MO I HAD THIS THING ON MY MIND FOR A VERY LONG TIME NOW INSTEAD OF THIS NETWORK OPERATORS TO IMPROVE NETWORK QUALITY ALL WE GET IS THIS PROMO OR THAT MEN IS REALLY ANNONYING YOU JUST SAID MY MIND UPGRADE OR GET OUT AFTER ALL WE PAY FOR IT ITS NOT FREE THANKS ALOT AM WITH YOU ON THIS ONE …..WIN A PLANE THAT EVEN THIER GM OR MD DOES NOT HAVE I THEY LAUGH

  12. eyereneID
    November 14, 2012 at 8:01 am

    I’m pretty sure the ban is the biggest news on the telecom sector for the year 2012. Maybe. Good one NCC! It was high time the whole madness was stopped. At least one can have peace now. Glo would no longer be disturbing someone’s peace with those text messages.

  13. Noni
    November 14, 2012 at 9:03 am

    No eyereneID, I’m not convinced by this or even how long the enforcement will stick. The NCC are not renowned for their consistency.

    I trust the telcos to lie low for a bit. They will sell our details to someone who will persistently send us annoying competition, horoscope and dating texts instead.

  14. Soji
    November 15, 2012 at 5:48 pm

    Ban or no ban all I want are better telco service…and an aeroplane *grins*

  15. November 18, 2012 at 3:00 am

    I’ve bn working for 1 of this telcos for 6months now and i must confess,its been very funny. I cant really say much because of the country we live in but truth is this,whether we like it or not this people will keep milking us unless we speak out and protest it.

    Mr mo has a point when he says that we could pay more to get more. When this whole gsm thingy started we all can remember how expensive it was to even own a sim,but now the crowd is too much and almost uncontrollable, what do u then expect them service providers to do?!

    Anywho ncc has done 1 good thing and we expect more. As for me I’ll keep being a nigerian,evading and surviving with a smile on my face.

  16. November 18, 2012 at 9:34 am

    Airtel, good grief! They would have driven the biblical patient Job nuts with all ‘em messages.

    Dear MTN:

    When NCC banned promos, I believed it was just the Airplane kind, you can’t believe my shock after I made a lengthy call and waited with a grin on my face for bonus airtime and got nothing. I’m a youth corper on a budget. Thank God for CPR though.

    Dear Glo/Etisalat:
    Haven’t forgiven either of you for the absolutely terrible and unreliable internet service. Anyway, kindly flash my primary line-mtn. If it connects, do let me know what dusty part of d house I buried you in.

    Starcomms

    I promised one of your staff at Bode Thomas that the next time I come to complain about your modem, it would be by asking pointed questions and wielding a flexible cane. Be expecting me this Thursday. Your modem didn’t disappoint…..it gave me a max of 5kb/s

    If I were too write a novel containing my sob stories about Nigeria’s Telco services, I would win nothing short of a Nobel prize
    In Literature for use of strong words and promise of violence (Starcomms *winks wickedly*)

  17. November 22, 2012 at 4:36 pm

    GBAM!!!

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