News From Telecom World

Its KPI that matters……….(choice between Subscribers Market Share and Revenue Market Share

Posted on: October 30, 2009

There is Tk. 800 tax on every newly sold SIM in Bangladesh. By adding the production cost, import tax and distribution cost with it total cost becomes something around Tk. 1200 for every SIM. But still time and again Bangladeshi Mobile Operators are introducing new campaigns to sell their connection as low as Tk. 150. Which means a subsidy of more than Tk. 1000 for each SIM sold. Grameenphone did it, Banglalink is doing it and Aktel, Warid, Teletalk are doing it all the time- selling new connection way lower than their cost. But question arises, why they are doing it?

I am sure that there is no real business case behind it. There is only one thing that can explain it is the ‘KPI factor’. All the big bosses of Bangladeshi mobile companies surely have some KPI. And a major part of that KPI is related to achieving or maintaining certain market share. So when they see their market share dropping, they launch one or two new sales campaign and try to gain some ‘EASY’ subscribers. Of course, most of the customers acquired through this process are multiple SIM users. They buy new SIM at a lower rate just for the fun of it. After using the initial bonus (freebies) they keep their newly purchased SIM in the pocket (or drawyer) and wait for a CRM campaign.

Though the company suffers a huge financial loss, the bosses achieve the desired market share, after all its KPI that matters. I think it is the fault of the ‘KPI setters’ who don’t recognize that subscriber market share is no longer relevant in a market like Bangladesh. They should set their KPI based on REVENUE MARKET SHARE instead.

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