Free Outgoing

Category: Offers | No Comments | Posted on March 1, 2006

Idea Cellular has announced “Outgoing Free“, an offer that allows the first two minutes free on all outgoing to local and STD numbers for its prepaid customer base.

This customer offering is available on all local mobile calls on purchase of the Rs 250 voucher with Rs 50 talktime, all local calls on purchase of the Rs 750 voucher with Rs 75 talktime, and all STD and local calls on purchase of the Rs 2000 voucher with Rs 200 talk time.

Once the customer has completed usage of first two minutes, calls will be charged at 1 Rupee for all cell-to-cell local calls, and Rs 2 for other local and STD calls for a period of 30 days from the date of purchase of these vouchers.

The catch is that the validity of vouchers for this scheme is 30 days. So you have to exhaust the recharge amount within 30 days, even if you keep disconnecting every 1 minute 59 seconds.

“We feel that about 90 per cent of the calls, be it local or STD, are less than two minutes of duration and therefore, new tariff package for pre-paid users has been designed keeping in mind this factor,”

I wonder how sustainable schemes like these are? It may work for acquiring customers but is certainly not good for ARPUs. But if the telcos are not looking at lifetime value of customers when deciding the viability of cost of customer acquistion, it can only mean one thing. And that is, the customers may not be profitable individually but their total number is good for company’s valuation. Especially during times of increasing M&A activity and consolidation of operators.

Source: Techtree