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


  • Irshad Ahmed

    Theeek kia Mr shahdat Husaain ni kafi loow comisin ha 2.8% from telenor …..

    • tRee

      Telenor tu jab se ai hai LOOT hi rahi hai.

  • Monis

    the retailers are thieves.
    they already deduct 1 ruppee on ever transaction below 100 and this is illegal .
    choar machaey shoar :)
    i support telenor

    • yasir ilyas

      I Agree with Monis. Or kuch retailer to 2 rupee bhi deduct kartay han. Or kuch to kamal hi kartay han mujh ko yad ha Lahore Bund Road main ik shop pr easyload k liye gaya wahan maine dekha likha tha esayload pr katoti ki jati ha. As Monis says below 100. Maine us shopkeeper say kaha maine 500 ka easyload karwana ha is pr to deductiion nahi ho gi to kehnay laga her 100 pr 2 rupees ye us waqt ki bat ha jub telenor retailers ko 3.5% ya 4% commision day raha tha. Ye tub bhi deduct kartay thay or ye ab bhi karain gay no metter commision kia ha 4% or 2.8%. Yad karain wo din jub 100 wala card 105 main sale ho raha tha kion 5 extra liye ja rahe thay. Retailer ko addat thi 500, 300 , 250, 1000 walay card bechnay ki or companies nay 100 wala card nikal dia to in ko just ik 100 walay card pr 3 Rupee achay nahi lagtay thay or 1000 wala bechain to 30, 500 wala bechain to 15, or jub koi customer apna number galat enter kar lay to ye barai itminani say kehtay ha ap nay khud hi likha tha hum kia kr saktay han. or customer k janay k bad ye us easyload ki reversal complaint karwa kr wapis mangwa laytay han. commision kia ha metter nahi retailer apna commision khud banatay han.

      • admin

        I am impressed with the amount of information you have for retailers. No customer would know this much in regular circumstances. Are you a sales executive?

        • yasir ilyas

          No! I’m not a sales executive. But i belong to this field

  • Munna

    I have my own shop in islamabad near pims hospital. Ham cost to cost load karte haim aap kitne paise dosge utna hi credit milega coz ham public ki falaah kelye ye kaam krahe hain

  • Stone

    Really?? Great unbiased reporting by propak……

    I mean c’mon do the retailers really work for the companies? Every retailer sells balance or cards from almost all companies, I am yet to find a retailer who is exclusive to one particular company and refuses to sell from any other……

    The retailers work for their interest and income only which off course is totally understood. Bottom line is that they were earning well enough to stay quite about the commissions till now and I doubt that apart from the one or two retailers supposedly quoted here, things will go on as usual. Even if they leave, there are many who still want to become retailers for celcos

    • admin

      Telenor is thinking the same: “Even if they leave, there are many who still want to become retailers for celcos”. I hope this turns true or…

      Moreover, to remain unbiased, I haven’t mentioned so many things that retailers told me, such as threats from celcos and more, as if they are on the payroll or cellular companies.

      • Stone

        LOL @ threats from telcos, tht sounds so like the mafia instead of business organizations, though intimidation would be there, I doubt actual threats. With such saturation in the market and overlapping products like banking services, I doubt any company would go the route of threats. They would risk loosing business becoz the retailer knows a lot of ppl in the area and can bad mouth them out of using a particular company.

        Also, what you added from the top exec of Telenor, that hints that the companies take business partners on board with such decisions, although not all of them agree……

  • Bilal

    @admin plz check the commission rates applicable arnd the world with maturing markets

    also, its a natural thing when business volume increases as down the money cycle rotation. the same money invested is earning them more in totality even if commissions are lower

    plz try explaining that to readers also

  • Guga

    Sales of Telenor and Zong is increasing, The customer base have augmented leaps and bounds in recent time.

    More Sales More Turnover!

  • Market Guru

    Dear Aamir, telenor reduced margin to 2.80% not 2.75%.

  • zain

    there are may more ways for earnings .
    for example today i saw incentive plan at retailer shop for just helping customers activating sms packages and gprs packages
    e.g help activating customer 2.5 rs sms package and get 1.5 rs as commission??
    help activating daily gprs of rs 5 and get rs 2.5 as commission

  • Its very good step and now it teaches *#9 easy load retailers

    Here in Peshawar if you give 50rs to shop wala for easyload they cut 4 or 6rs first and put 46 or 44rs and also earn commission on those 44rs

  • rty

    Telenor ka boycott karo sab plzz,ye jab se ai hain sirf loot hi rahay hain sab ko,kabhi awaam ko aur kabhi retailers ko.

  • Mani

    telenor has this habit of lowering commissions and increasing charges, which are later on replicated by other operators.

    I wouldn’t be surprised to see other operators following the act. retailers, its now or never situation for you chaps.

    • Shahid Saleem

      As a country we cannot even agree to boycott goods by India or even Israel or US. Despite many protests and actions.

      Your “it’s now or never” is meaniningless, they will do nothing.

  • M.Aswad Mehatb

    The easypessa retailers are just offer money transfer .. instead of broad claims they do not accept any utility bills most of the times …

  • Muhammad Anas

    I think Telenor Customers seldom do easyloads instead they use vouchers (as Telenor is the network best suited for rich people). I used to run small easyload shop and I noticed the lowest Balance Load Demeand of Telenor subscribers while Zong and Ufone were at the top for the same.
    However this is not an high decrease in commison rate if you were getting Rs.3 on Rs. 100 load now it will be 2.80.

    • admin

      With Poora Pakistan offer Telenor has attracted lots of low-end users

    • Wahid eLoad

      This is not true, we run a large easyload business with more than 500K Rs. daily sale and more than 37% of my total sale is for telenor easyload. Now 0.2% decrease is a big deal for us :-(

      • hamza

        wahid.. i need telenor easy load sim am frm khi.. 0332 2433583 is my num

  • Not United

    You disunited Pakistanis, your cut in margins is going to Oslo, Norway.
    Heed Quad e Azam advice and all work together,

  • Zubair Ali

    Hi there I belong from zong.
    Our margin is still better than other companies and this action has been taken to protect business partner’s profit..
    Market was effected by extra percentage means even load was available @ 10%
    However zong still give at its best to retailers through value added services Sims activations nd on MNPs .
    Moreover soon zong is going to launch branchless banking with partnership of Askri bank which will contain lots of services. Benefits for retailers nd customers
    I also heard ufone also going to reduce its percentage

  • Ab.d

    hello all, why don’t telecom companies control their own overheads, they are incurring hell of expenditures on their Directors and VPs… why don’ they cut or even stablize their renumeration.

    Cruel king always restrict the lives of poors and not think of its own family. yahan king ka rule hey,,, downsizing/layoffs/business parteners commission destructuring all are the habbits of these cruel management. they don’t even think to stablize or cut their levish circle….huh…….

  • Sikandar Butt

    I had come to know the volume of telenor easy load a few days back. It is something beyond our imaginations dear fellows. Telenor is offering the best mobile services in the country. There is a rule that top brands give lowest margins, but their sales volume attracts the retailers. So, i dont think so Mr. Shaddat’s one statement is going to make any difference. Telenor is the best!

  • nadeem ahmed

    every one is slaughtering other . no matter who is being slaughtered and who is slaughtering. !
    No system ! no governance . No nothing ! just
    pakistan zindabad :)

  • bahadar jadoon

    The Commission reduce from T.Noor and Zong which is very bad effect on retailer this time expenses is increase they have reduce the margine. I think the sale of both company will be reduce due to this in future because the retailer are not interest in sale of theses both company