Telenor adds 5 percent fee on all products

[aamir attaa]

Telenor's website says: "Dear Prepaid Customer, from now onwards 5% additional service charges (on recharge face value) will be applicable on all recharges via easyload or scratch card for all prepaid customers..."

Others to follow??

Regards,
Aamir
http://www.propakistani.com

[Saad Ibrahim]

from your blog post:

The interesting point to note here is that Mr. Irfan Wahab Khan, Executive Vice President Telenor Pakistan, himself was not happy with added taxes on telecom service. He spoke about various price hikes only few days before Telenor announced this added service charges on their products.

I think he was criticizing it because they were themselves going to add their own taxes so if government did this it was double trouble for customers but they didn't deter and added it

i hope PTA takes some action

On Thu, Sep 25, 2008 at 4:57 AM, Saad Ibrahim <msl....@gmail.com> wrote:

WTF man sorry to say the telecoms boom is over now there is a boom of increasing prices, PTCL started increasing first

[Shaheer Khan]

Hold your horses - remember when other telcos started charging for
their helpline? A few others followed suit.

But this is pathetic. We have to pay 10% as income tax, 21% as sales
tax, and then 5% service charges? Why not pay the whole amount as part
of our taxes and service charges!?!?!??

On Sep 25, 4:01 am, "Saad Ibrahim" <msl.fr...@gmail.com> wrote:
> from your blog post:The interesting point to note here is that Mr. Irfan

> Wahab Khan, Executive Vice President <javascript:void(0)> Telenor Pakistan,

> himself was not happy with added taxes on telecom service. He

> spoke<http://telecompk.net/2008/09/06/criticism-of-pta-telecom-policies-by-...>

> about
> various price hikes only few days before Telenor announced this added
> service charges on their products.
>
> I think he was criticizing it because they were themselves going to
> add their own taxes so if government did this it was double trouble for
> customers but they didn't deter and added it
> i hope PTA takes some action
>

[aamir attaa]

Soon we will have to bear new charges such as

• Call Setup Charges (Already in practice by Mobilink and Zong)
• Spectrum access charges
• Call termination charges
• Message Delivery Charges
• Missed Call charges...and the list can grow
  

lol...


Regards...

[Zarrar Khan]

I understand the concern you guys have but the cell phone companies
are in Pakistan to make a profit. They are not charities. The cost of
providing services in Pakistan has increased by 23% and still you
expect these companies not to pass this on the customer? Why not?

When the inflation in Pakistan is 31% for the current month, fuel is
increasing, financing cost is increasing, rupee is depreciating (hence
more expensive equipment), steel prices are increasing, then from
where do you expect these companies to stay afloat.

If you look at the tarriffs in the dollar terms the cellular tarrifs
have come down by 21%. But the price of equipment, fuel and steel has
increased in dollar terms. This is not fair on your part guys.

Cheers,

Zarrar

On 9/25/08, aamir attaa <aam...@gmail.com> wrote:
> Soon we will have to bear new charges such as
>

> - Call Setup Charges (Already in practice by Mobilink and Zong)
> - Spectrum access charges
> - Call termination charges
> - Message Delivery Charges
> - Missed Call charges...and the list can grow

--
Sent from Google Mail for mobile | mobile.google.com

[Omer Farooq]

They are lowering basic tariff but with recent increase in prices now they need to put charges on somethings to help themselves because they cannnot afford to increase and decrease call/sms rates.

[Babar]

Zarrar has a good point - telcos are not immune to the economic
pressures. Price wars are common so if others want to keep absorbing
costs, they can take advantage of this situation. It is a questions of
what will the market take. I believe that the government should not
have increased the taxes - it already forces the mobile companies to
absorb 500 Rs SIM and gets lots of other royalties.

Babar

On Sep 25, 8:31 am, "Zarrar Khan" <zarrar.k...@gmail.com> wrote:
> I understand the concern you guys have but the cell phone companies
> are in Pakistan to make a profit. They are not charities. The cost of
> providing services in Pakistan has increased by 23% and still you
> expect these companies not to pass this on the customer? Why not?
>
> When the inflation in Pakistan is 31% for the current month, fuel is
> increasing, financing cost is increasing, rupee is depreciating (hence
> more expensive equipment), steel prices are increasing, then from
> where do you expect these companies to stay afloat.
>
> If you look at the tarriffs in the dollar terms the cellular tarrifs
> have come down by 21%. But the price of equipment, fuel and steel has
> increased in dollar terms. This is not fair on your part guys.
>
> Cheers,
>
> Zarrar
>
> On 9/25/08, aamir attaa <aam...@gmail.com> wrote:
>
>
>
> > Soon we will have to bear new charges such as
>
> >    - Call Setup Charges (Already in practice by Mobilink and Zong)
> >    - Spectrum access charges
> >    - Call termination charges
> >    - Message Delivery Charges
> >    - Missed Call charges...and the list can grow
>
> > lol...
>
> > Regards...
>
> > On Thu, Sep 25, 2008 at 6:00 PM, Shaheer Khan

> > <shaheer.a.k...@gmail.com>wrote:

[Saad Ibrahim]

i have heard ufone also added this

[Saad Ibrahim]

jazz also added it:
http://www.mobilinkgsm.com/jazz/index.php

On Thu, Sep 25, 2008 at 7:36 PM, Omer Farooq <omerfa...@gmail.com> wrote:

[Mudassar]

There should have been some cushion by the government. In order to
make more customer base they kept lowering the tariff and ultimately
lost the feasibility. There should have been some stop point as far as
tariff reduction is concerned like it happens in rest of the world. As
per my information, Pakistan has lowest tariffs across the world which
is a very lucrative thing from customer's point of view but from
operator's perspective, it is killing. We will see the upward trend
now from other operators as well....or we may lose the telco boom
which we are seeing already...

On Sep 25, 3:36 pm, "Omer Farooq" <omerfarooq...@gmail.com> wrote:
> They are lowering basic tariff but with recent increase in prices now they
> need to put charges on somethings to help themselves because they cannnot
> afford to increase and decrease call/sms rates.
>
> On Thu, Sep 25, 2008 at 1:08 PM, aamir attaa <aam...@gmail.com> wrote:
> > Soon we will have to bear new charges such as
>

> >    - Call Setup Charges (Already in practice by Mobilink and Zong)
> >    - Spectrum access charges
> >    - Call termination charges
> >    - Message Delivery Charges

> >    - Missed Call charges...and the list can grow
>
> > lol...
>
> > Regards...

[aamir attaa]

Ufone has joined the fun too... website says:

Dear Prepaid Customer, 5% additional service charges (on recharge face value) will be applicable on all recharges via UTopup or scratch cards, effective from 26th September 2008.

Regards,

Aamir

[Rakesh Kumar]

you mean to double the tariff essentially? :)

And why are these charges only for prepaid customers? Like I still cannot understand the rationale. Is it because of the inflation or the operators have trouble maintaining their second order revenue derivative?

[Saad Ibrahim]

everyone will do that now! and may increase this 5 % too
i think government should now remove the taxes as we are paying too many taxes

[Mudassar]

Prepaid being the larger chunk and major revenue generating section
has to bear this if telcos really want to earn more revenue. with
calling rates in "8 aanay/12 aanay" there is no juice left and with
ever increasing expansion cost and fixed expenses due to inflation and
current economic condition. The only way to maintain the profitability
is to either increase rates in this fierce competition or do something
else like the one mentioned to secure revenue. Indian operators still
enjoy higher calling rates and secured revenue. One of the Airtel
calling plans is

MRP Rs. 2,999/-
* Rental - 149/-
Local - Rs.1.99/min
STD - Rs.2.99/min
SMS - Rs.1.99/Rs.2.99/Rs.5 (Local, National, International)
ISD & Roaming - As existing

which shows more margin from operators' point of view as compared to
Pakistan where heavy price war has created the alarming situation for
the investor.

On Sep 25, 11:57 pm, "Rakesh Kumar" <gopchand...@gmail.com> wrote:
> you mean to double the tariff essentially? :)
>
> And why are these charges only for prepaid customers? Like I still cannot
> understand the rationale. Is it because of the inflation or the operators
> have trouble maintaining their second order revenue derivative?
>

[Fouad Bajwa]

Hi Amir and all,
My mobilink postpaid bill has been carrying an additional GST of 21%
on my number and gprs accounts, and I've been charged a 21% on all my
prepaid recharges on my Ufone since the news came out so I think it
was applied equally to all the telcos!

Fouad Bajwa

--

Regards.
--------------------------
Fouad Bajwa

[Fouad Bajwa]

Mudassar,
within these few days, I saw on GEO TV that the new PTA Chairman, the
doctor guy made a statement about how this 21% GST was kicking
consumers and telcos pocket alike and that the legislators should
reduce their stronghold through these crazy new taxes for the
citizens!!!

I know its nuts, and its driving me crazy.........I don't know if you
have noticed, but if you pay additional advance amount in your post
paid bills you are also charged an advanced tax.........I do so to
keep the service running when I am traveling but trust me, the charges
in Advance Tax have been crazy, the telcos have got both of their
hands with the government in the pockets of the consumers and as far
as my experience is concerned, the government isn't going to reduce
this amount!!!!

Our telcos and consumers are in for a Economic Mobile and Telephony Recession!

Hang on to your hats!!!!

--

Regards.
--------------------------
Fouad Bajwa

[Farzal]

To Zarrar & others justifying the charges on account of inflation,
etc:

Telco companies currently consume almost 20-50% of ad-space available
on TV, depending on the channel. They sponsor the highest paid models,
actors, players and singers for their campaigns.

Is there anyone here to share the marketing budgets of these
companies? I've managed a 20 Million Rs. marketing budget once in 2005
- and I can safely say a Telco spends 200 times more than I did, so
Rs. 4 Billion each. I am sure its more.

(quarter page dawn add on Sunday: 0.5 Million, 30 second TV slot:
0.1Million, news sponsorship: Million a day, billboard: 0.5 Million a
month, TV ad production: 5 - 50 Million)

Then there are the highest level of perks given to everyone from CEO
down to rental car drivers.But I think they compare anything to
bleeding money on ads.

The industry is highly inefficient, and spends our hard spent money
lavishly on producing and broadcasting the silliest meaningless
advertisement.

[Zarrar Khan]

The mobile companies spend 2.5% to 4% of their revenues on ads. OPEX
is generally 40% of revenues. Where do you think the problems lie.

The industry has understood that they will have to raise prices in
line with the rising costs. And this will happen. And for nay sayers,
let's bring the price of bread down first.

Sorry for the bitter tone. But atleast I'm realistic.

Cheers,

--

[Sameer Bokhari]

furthermore advertisement expenses vary for different stages of a product's life cycle...

 

they can also vary from product to product and industry to industry, FMCG and beverage companies generally spend more on promotion campaigns than other industries.

 

new products/improvements/vas requires a more agressive marketing campaign and hence higher marketing and advertisement expenses.

 

also the level of competition, declining sales, high sales targets , the overall marketing strategy like challenging the leader etc etc can lead to more agressive advertisement campaign.

 

a budget allocation of 20M can only be compared with that of a 4Bn if all factors are similar and kept constant.

 

My opinion is that fierce competition led these companies to price wars and probably limits were crossed at some stage. Plus the factor of increasing cost of doing business has led to this adjustment in the form of an additional service charge.

 

It should also be kept in mind that this upward adjustment is not unprecedented across other sectors of the economy.

 

 

- S B

[Farzal]

Hmmm, I am not too sure. Please see if this logic is correct. Let's
use Telenor PK as an example. Numbers from Telenor Global Q2 2008
report:

Input:
1. EBITDA/Revenue (also called margin): Between 3.7% and 20% in last
few quarters. Lets use 20% to play safe.
2. Revenue: PKR 60 Billion projection

Output:
1. Adding 5% surcharge will result in additional revenue of 3 Billion
2. Bottom line effect at 20% of 3 Billion will be 600 Million (at 3.7%
it would have been only 110 Million)

Instead:
1. Every $ saved on marketing shows up on the bottom line (esp. if
similar reduction by all players)
2. At 4% of 60 Billion, the ad-spent is Rs. 2.4 Billion
3. To generated 600 Million, they could have reduced ad-spent by 25%
4. 100 Million can easily be saved by using 'ordinary' citizens
instead of celebrities

If the companies could agree in a cartel like environment to add
surcharge, they can also sit down to reduce their NEEDLESS spent on
'rivalry' ads which have become common over the last 6 months

[Muhammad Asif]

The Govt. charges 33.10% as taxes (it is compound of  10% and 21%) and this additional 5% goes in the pocket of these cell phone operators.

Asif

[Mudassar]

PTA has just asked the companies to let subscribers know about the
newly imposed charges by giving proper ads in newspapers.
Initially all the operators had copied each other by putting this
notice on their respective websites. Prepaid is a service of masses
how come people from remote areas would come to know about this extra
charge as most of the users do not even recharge their card themselves
instead they ask the shopkeeper to transfer the load. And our
operators expect them to get info from their websites....?? Perhaps
they wanted to keep it secret....

On Sep 27, 5:01 am, "Muhammad Asif" <asif...@gmail.com> wrote:
> The Govt. charges 33.10% as taxes (it is compound of  10% and 21%) and this
> additional 5% goes in the pocket of these cell phone operators.
> Asif
>

[Omer Farooq]

It is not only telenor who did that. Mobilink and Ufone joined hands for that too.

[Shaheer Khan]

One thing: the telcos should simply increase their tariff instead of
having an access charge.

I do agree that the prices should increase, but this is a bit too
much. They should be straightforward. And the USF access promotion
charge, which all telcos are trying to get rid of, is also hampering
their revenue growth. The market is highly competitive hence the huge
amounts of advertising, and operators are fighting for market share
(look at Ufone and Telenor - neck and neck). Sum all of this, and you
should get your answer as to why the charges are increasing.

But I'll reiterate my point of view again: increase the tariff (with
an explanation) rather than levying some percentage known as an access
charge blah blah blah. They've done it for international calls!

[bmug...@gmail.com]

There could be several motives at the back of this because of the primary markets growth have fallen, so now it may be clear that cellular organizations are focusing on generation. The question is, is this the end or begining of another price combat?