On June 25th 2012, Tata Docomo‘s VAS department sent across the second list of “BDRC numbers” to VAS companies, a list, we’re told that is pretty large. BDRC refers to a database the telco has created, of customers who are BalanceDepletionRepeatComplainants.

This process was begun on the 21st of May 2012, where a set of customers who complained often about VAS billing would be blacklisted (interesting choice of words) from being subscribed to VAS services on any platform for a period of 90 days, and only be allowed event/pull/browsing based products such as wallpapers, ringtones, voice browsing services, SMS pull etc, but most importantly, no subscription services.  As a part of inclusion in this “blacklisting period”, Tata DOCOMO communicates to the customer that they will not be able to subscribe to a service for a 90 day period. They’re automatically delisted from the database after 90 days.

This is a welcome move by Tata DOCOMO, and is the latest step in a series of moves by the telecom operator. Earlier emails (also with MediaNama) point towards other steps that are a part of this Project Clean VAS.

An email dated May 17th 2012 states that New customers shall NOT be promoted any VAS for a period of 10 days from the date of activation on the network, and the launch of START/STOP services to allow customers to activate and deactivate VAS services, launch of VAS statement on Demand, to allow customers to check which services they are being charged for, stringent audits of discrepancies via reconciling activation logs with call to action logs for services, and a penalty matrix for VAS companies, which includes suspension of promotion for new activations for a period of 90 days, monetary penalties, and potential for termination of VAS-telco relationship.

An email dated January 4th 2012 calls for “No VAS activity” on “Zero Usage Bucket subs”, that all VAS activations be proceeded by a landing deck with all information on price, validity and product description requesting a reconfirmation, and VAS activations be only as a result of a double confirmation (IVR, SMS, WAP, USSD). Third party WAP products also have to have landing decks, and WAP banner texts to be “extra bold” for purpose of clarity and understanding.

Several other measures are mentioned, but mails that follow clearly suggest that companies haven’t been following the guidelines, and knowledge of connivance between internal and external parties, stating that “We are shocked at the audacity and callous manner in which some unprincipled and unethical practices have been carried out.”

This is the acknowledgement of the problem of fraud (politely referred to as “false billing”) that exists in VAS ecosystem.  This isn’t the first instance of telecom operators trying to enforce more accountability in the system: last year, Bharti Airtel had instituted a series of changes regarding billing, with the intent of reducing customer dissatisfaction, including the removal of billing of customers with a negative balance.

Our Take

We’ve heard about a company whose subscription base for an alerts service has declined by almost 90% when a telco shifted them to an internal subscription engine. With the regulator now looking into these billing practices, and telcos also being able to monetize an alternate revenue stream in the mobile Internet, Mobile VAS looks like it will go through a tougher time, but it also raises a few question – has his industry largely been built on defrauding customers? How many real products and services are there in the market – things that customers actually want/need/buy?

While the issue is largely with subscription based businesses, which means that customers get billed automatically on a recurring basis, it is by no means restricted to them. I’ve been billed for animations that I haven’t bought, just as my mother was being billed for job alerts she never subscribed to (she thought it was spam). The charges, in both cases, were reversed when I complained, but there are many customers who don’t know where their balance goes, or what to do about it.

One suggestion, if you’re a telecom operator genuinely interested in ensuring that customers have an easy way out of this subscription mess: Restrict subscription services to 30 days minimum, and on a minimum balance, and put in place a 10 day money back guarantee, no questions asked, and do whatever it takes to build customer confidence.

I’m reminded of how things were with online shopping was once in India, where people were often delivered sub-standard products, or products different from what was shown on websites. It took a few companies with a crazy focus on delighting customers to turn that around. VAS will need the same, and on a much bigger scale.

Tata DOCOMO’s Response

In response to our questions on whether there been a reduction in complaints around VAS, what the company has done about non compliance with the guidelines, the number of vendors that have been penalized and how many customers there are in the BDRC, Tata DOCOMO has sent the following response, attributable to Rishimohan Malhotra, Head VAS Mobility, Tata DOCOMO:

The telecom industry has faced this issue for quite some time and Tata DOCOMO has been at the forefront of ensuring true customer satisfaction via innovative methods. While Tata DOCOMO follows stringent system driven processes as a rule, we are also the 1st in the Industry to have initiated Common Minimum Threshold Balance which enables, across all VAS Domains, a minimum amount to be kept available in a subscriber’s account for Voice/SMS activities. This has resulted in a high Satisfaction Index amongst our subscribers since mistaken activations are hugely nullified. Furthermore, in the interest of customer empowerment, Tata DOCOMO subscribers are enabled to activate or deactivate any VAS Service via multiple modes such as SMS, USSD or IVR codes apart from the TRAI IVR Code. Additionally, Tata DOCOMO follows a Service Guarantee policy with full refund within 48 hours.

Updates: Forgot to mention that this is a welcome move by Tata DOCOMO, and something we hope and expect other telecom operators will also emulate.