Telenor and Zong Decrease Retailers’ Margins Amid Country Wide Boycott Threats

Zong_TelenorTelenor and Zong have decreased retailers’ commissions for account-recharge (easyload) transactions, tell us sources in the market.

After revising the commission structure, Telenor has decreased its easyload commissions form 3% to 2.80% for retailers, which is now industry’s lowest commission rate offered by any cellular company.

While, on other hands, Zong revised its commission structure by offering 3% margins to retailers – down from 4% which was once industry’s highest commission.

Retailers, considered as crucial channel partners for cellular companies, are apparently not happy with the commission restructuring.

Shaddat Hussain, a retailer from Islamabad while speaking with ProPakistani, expressed his displeasure on the move. He said that instead of shrinking their own expenses, cellular companies are cutting our margins despite their increasing customer base and the revenues.

Shaddat further said that cellular companies deduct 7 percent of customers’ credit in the name of service charges but they wouldn’t share this profit with their channel partners who work for them round the clock, without any obligation.

Shaddat said that he is boycotting all Telenor services including EasyLoad, EasyPaisa, SIM replacements and new sales.

“We are not Telenor employees and won’t accept such kind of sufferings on our income. We, retailers in Islamabad and Rawalpindi, have decided not to sell any Telenor product while retailers from other parts of the country are joining the campaign”, said Mr.Shaddat.

If decision is not taken back, retailers are likely to organize a large scale protest in Islamabad and other parts of the country soon, tell me other retailers from various regions.

According to retailers, they are somewhat contented with Zong’s new commissions rates, as they are now leveled at industry rate of 3%margins. However, they won’t put extra efforts for Zong’s sales like they used to when commission was industry highest at 4 percent.

We reached out to Telenor to know their viewpoint over the situation, but we are yet to hear back from them.

In a related news, Mobilink has revised retention commissions for its franchisees in a manner that less than 70% CDR/Recharge target achievement will be eligible for zero commission. This move, which is apparently triggered to focus on new sales, will encourage high performing partners however those franchises with low performing regions with less than 70 percent target achievements are going to earn ZERO commissions.

Update:

Telenor has responded to our query by sharing following quote from Mr. Aamir Ibrahim, Chief Marketing Officer of Telenor Pakistan:

Some of the players in the industry have adjusted agent commission in recent days. Telenor Pakistan offers a broad portfolio of services with multiple business avenues for its partners such as Easypaisa and multiple value added services.

We have marginally adjusted agent commission from 3% to 2.8% on recharge in view of the overall service portfolio (including Easypaisa) we offer. In view of our mutually beneficial business relationship, most of our retail partners have readily agreed to the adjustment and the few that hadn’t are realizing the need and are following suit.

Over the last few years the size of industry has increased very significantly and occasional adjustments have to be made to ensure fair return for all parties. We have reduced retailer commission by approximately 6.5% whereas retail volumes have grown by approximately 20% on year on year basis.

We aim to continue working with our partners to ensure benefit to our partners and our consumers.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK