My Thoughts on Technology and Jamaica: CLARO Responds - You couldn't pay us to switch

Friday, April 9, 2010

CLARO Responds - You couldn't pay us to switch

The battle for customers among the Telecoms Providers has just gotten interesting. The first signs were seen in the advertisement about Telecom Provider CLARO on YouTube attack ad in the Sunday Gleaner, published Sunday January 31st 2010, which when viewed on YouTube, directly attacked Telecom Provider Digicel, with a phone clearly identifiable as a Telecom Provider Digicel  phone in a parody on how to save money with a Telecom Provider Digicel  phone.

Whether or not this is a Telecom Provider CLARO endorsed advertisement remains to be seen, but one thing is for certain, the second advertisement for Telecom Provider CLARO in the Wednesday April 7th 2010 Daily Gleaner and Wednesday Star specifically on pages A7 and 7 respectively is definitely Telecom Provider CLARO’s. And they are simplistically strident in their sharp black and white, the red logo being the signature of Telecom Provider CLARO.

But what resonates with John Public is the substance of the advertisements in this oldest of media expression. It is the idea that people satisfied with a service refuse to switch, not because they do not like freeness from Telecom Provider Digicel, but reality demands saving on local Voice Calling, and Telecom Provider CLARO seems to be doing just that for consumers.

Both ads clearly state that the competitor Telecom Provider Digicel is Calling people in a bid to solicit them to switch to Telecom Provider Digicel.

This is amusing, as being in operation officially under the brand name Telecom Provider CLARO since September 2008, one would have thought that Telecom Provider Digicel, the more established brand with its over-the-top promotions and giveaways would not have to resort to “cold Calling” - random calls to competitor’s customers – in order to entice people to switch from Telecom Provider CLARO to Telecom Provider Digicel, especially as they are “the Bigger, Better Network”.

Telecom Provider Digicel’s offers and advertising should be sufficient, evidenced from their irrationally high levels of spending on advertising, promotions and no new product launches.

Granted, Telecom Provider CLARO has yet to launch any new products with the exception of its Wireless 3G Internet service, its main talking point with a current maximum speed of 1.5 Mbps (700 kbps in real life), but this aside Telecom Provider CLARO does have enticing Prepaid and Postpaid Plans, especially attractive in these tight economic times.

One would have thought that despite the offers of Free Calling as a permanent feature with certain conditions to control fair usage, the lack of other Telecom Provider CLARO customers to call would be a disincentive to purchasing a new Mobile phone from Telecom Provider CLARO, not to mention the spotty GSM coverage.

But Telecom Provider CLARO had drawn the line in the sand by simply pushing Flat rate Calling the end result of MNP when it is eventually introduced supposedly later this year as slyly hinted in the article  OUR signals policy shift on portability - Says Jamaica running out of phone numbers”, published Friday November 20, 2009 by Mark Titus, Business Reporter, The Jamaica Gleaner.

Postpaid Plans with Free Mobile phone offers as prizes as a means to encourage talking on their Network and periodical prepaid offers, using basic simple statistical advertisements and offers coinciding with holiday periods with advertisements that are in synch with when people are more inclined to spend.

This is most likely the explanation for Telecom Provider CLARO’s claim as being “Jamaica’s Fastest Growing Mobile Network” as despite its relatively basic Voice Calling service, the permanent Free Calling for both local and international call Voice Calls is the main draw to customers that seems to be spurring the switch from the other Telecom Providers to Telecom Provider CLARO.

The only other Telecoms Provider doing similarly is Telecom Provider LIME, with its signature SupaPak and UltraPak offerings and low on net rates and Flat Rate Calling agreement with Telecom Provider CLARO.

The ultimate proof of the effectiveness of these Pricing Strategies, however, is dependent upon the results of a scientifically conducted survey requesting people to demonstrate their loyalty by stating which Network they would most like switch to or remain.

But based on anecdotal information from members of John Public, it would appear that John Public’s long held view that Pricing trumps Advertising is ringing true, as Telecom Provider Digicel  is slowly beginning to realize a bit too late it would appear, that Telecom Provider CLARO is holding on to the “hard end” in this now exciting game of Telecoms Providers dominoes, as their basic strategy is not only yielding results but it is forcing Telecom Provider Digicel to resort to “cold Calling”.

Possibly they may be experiencing increased churn. Telecom Provider LIME, Telecom Provider CLARO’s partner in crime, at least in terms of co-locations sites, is also resorting to the same tactic of “cold Calling”, indicating that the economic affects of the Recession in the United States of America on the spending power of Jamaican citizens is affecting both Telecom Provider LIME and Telecom Provider Digicel, possibly with people defecting in earnest a fact reflected in an increase in churn.

Like RIM, Telecom Provider Digicel and Telecom Provider LIME are now facing a rather stark reality of gradually losing more and more of their customers to Telecom Provider CLARO as the economy gets worse and worse, as initially people may have purchased a Telecom Provider CLARO phone to try out the Network and probably put it aside due to their being hardly anyone to call and poor Network coverage

They now have begun using the Telecom Provider CLARO phones full time, ostensibly purchasing dual SIM phones to hold on to their old Telecom Provider Digicel or Telecom Provider LIME number

They have the benefits of the Telecom Provider CLARO service and purchasing cheaper phones for persons that they frequently call, thus building up the Telecom Provider CLARO’s customer base literally by word of mouth even in a period of increased economic hardship.

One therefore,  can only imagine what it would be like had MNP (Mobile Number Portability) which currently is on the cards as stated in the article “OUR signals policy shift on portability - Says Jamaica running out of phone numbers”, published Friday November 20, 2009 by Mark Titus, Business Reporter, The Jamaica Gleaner, been implemented.

This despite initial reservation being expressed by CEO of Telecom Provider Digicel, Mark Linehan that gave the impression that it was years away as expressed in the article “Mobile firms divided on number portability - OUR not ready to take on issue”, published  Friday, 15 May 2009, The Jamaica Gleaner.

Telecom Provider Digicel and Telecom Provider LIME would do best to adopt a Free Calling model of some sort or face increasing levels of churn. This is in light of the fact that if Jamaica is still dependent on Oil for Energy purposes by 2015 with no net investment (local and foreign) and increase in production as opposed to an emphasis on services.

This global inflationary effect that this increase in the main driver of production will force the entire world into a Second Recession. 2015 is the year of Peak Oil as predicted by the article IEA official warns of shrinking Oil supplies: Report”, Sunday August 2nd, 9:04 pm ET, AFP, Yahoo News and echoed by other than Sir Richard Branson and British Business Leaders in the article “World faces Oil crunch by 2015”, published Sunday 14 February 2010, The Sunday Herald (AFP).

This is now possible and shaping up to occur in the United States of America, due to its reliance on Oil and usage of debt to encourage spending in the short term, its abundance of ill-placed faith in the Services Sector and lack of investment in the Production Sector.

This Second Recession, referred to as a Double Dip Recession or “W” shaped Recession Recovery as opposed to a long term “U” shaped Recession Recovery is a theory which is echoed by Dennis Chung in the article “RISK OF A DOUBLE-DIP RECESSION?” published Friday, September 18, 2009, contributed by Dennis Chung, Business Observer.

Telecom Provider CLARO, it seems, finally have begun to put on their game face in possibly the worst of financial times and is gradually taking the battle to Telecom Provider Digicel both in the competitive Voice Calling front as well as in the legal front.

This as Telecom Provider CLARO have already filed legal proceedings in the First Quarter of 2010 against Telecom Provider Digicel and a complaint with the FTC (Fair Trading Commission), alleging that the Cross-Network Calling rate contract into with Telecom Provider Digicel, albeit legally binding, in light of the Privy Council ruling on the protracted 2002 Telecom Provider Digicel and Telecom Provider LIME case relating to OUR oversight on setting Cross Network rates is now null and void, and can be claimed also to be an example of anti-competitive action on the part of Telecom Provider Digicel.

The eventual end result would hasten the OUR‘s to play it hand, with regulation and imposition of MNP and something that John Public would appreciate: Cross-Network Flat Rate Calling between all Telecoms Providers.

With Telecom Provider Telecom Provider LIME still unable to launch 3G since September 2008, Telecom Provider CLARO is currently king of 3G modem penetration, a springboard for future service expansion as we become more used to always on high speed dialup 3G Internet.

However, as the summer looms, many are asking the following questions: When will Telecom Provider CLARO launch the Apple iPhone 3GS and the Apple iPad? And are their Unlimited Download Plans? What about the transition to faster LTE (Long Term Evolution?

The Summer of 2010, possibly the greatest Summer ever in terms of Wireless Broadband awaits as globally the world ramps up for 4G.

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