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The MNP Effect: Discounted Lock-In’s, Rate Negotiations

Call it the MNP after-effect but mobile companies are apparently going all out to prevent competitors from poaching existing customers. Varun Singh, Founder, Scalarc Inc, sent us a scan of a contract from Vodafone, which the company sent to him to try and lock him in once he made an MNP request. The contract suggests that the telecom operator was trying to offer a voice or data plan that matching any of its competitor in lieu of a 12 month commitment to stay with Vodafone. If the customer breaks out, he will have to pay the cost of the freebies.

Singh, a post paid Vodafone subscriber decided to port out to Reliance since it offers a cheaper data plan at Rs 99/month for 2.5GB allowance compared to Vodafone’s expensive Rs 299/month for 2GB data plan. After the port out request, Vodafone approached him and offered to match Reliance’s plan if he signed a 12 month contract.The contract also states that the customers pays for the discounts if he ports before the completion of the time period.

A few days back, Techtree also reported Vodafone users being offered cheaper data plans after porting requests. We believe that MNP has brought another level of competition in the market and operators like Vodafone, who charge higher rentals for data plans without offering any value adds, will have to match other networks or lose customers. However, retaining customers by locking them in contracts goes against the spirit of a free market and is an anti-customer move. Since talk plans have more or less leveled, the next tariff war is all set to be fought in the arena of data plans, specially now, with the launch of 3G.

Another Airtel and Vodafone customer told MediaNama that in the initial days of the MNP, telecom operators were openly negotiating with some customers, offering them whatever it took to retain them – Rs. 100-200 discounts, cheaper plans. So if someone says that MNP hasn’t had an impact that it was expected to, think again.

A copy of the contract:

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