Ripping Off Customers through Value-Added Services


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Recently I purchased an EVO-Nitro, which is one of Pakistan Telecommunication Company Limited’s (PTCL) top of the line wireless broadband devices. It is available as a USB (Universal Serial Bus – data transfer) stick or PC card and thus is a plug-and-play portable connection, which allows users internet access anywhere in around 100 major cities of the country. Since PTCL claims that EVO-Nitro offers blazing speed of 9.3 Mbps,. so I decided to buy it discarding the other less expensive solutions. I paid about PKR4,000/- for the USB stick and around PKR3000/- as monthly line rent in advance i.e., a down payment of around PKR7000/- in total (Note: PKR stands for Pak Rupees). If I had bought a lower category option of EVO 3.1, I would have paid about the same PKR4,000/- for the USB stick and around PKR2000/- as monthly line rent in advance i.e., a down payment of around PKR6000/-, but then according to PTCL package I would have gotten a speed of up to 3.1 Mbps.

So I was happy to make the purchase thinking I bought the best possible service. My friends and well wishers sympathized with me realizing I would pay PKR 3000/month just for internet connectivity. But down in my heart I was happy as I always preferred quality over price. My thesis about price versus value is the same as it is said ‘a cynic is a one who knows the price of everything but value of nothing’ even though I also believe that cost is a function of quality too.. Apart from this I really know how to make best out of internet surfing.

But as I started using EVO-Nitro I realized that I never achieved a speed above 3.0 Mbps even I tried at different places. .I felt betrayed so I went to report my problem to the nearest PTCL customer center, who after examining my EVO-Nitro stick advised me to go to the ZTE (Chinese vendor from whom PTCL purchases EVO-Nito) office in sector I-9, Islamabad. Why should I contact ZTE when I purchased the stick from PTCL? I asked PTCL customer center staff whether I could get the connection downgraded to EVO 3.1 but they informed me it was not possible. This is happening under the nose of Pakistan Telecommunication Authority (PTA – the regulatory body of telecommunication sector). Stories of this fraud have been reported by many on different blogs, but nothing has so far been done to rectify the issue. Why should PTA do anything when they are only interested in making money through licensing and royalty fees?.

Another issue is that when a subscriber recharges his mobile phone with a PKR100 prepared card he actually gets a load only of PKR74 as PKR36 are deducted in government taxes straight away. Some service providers deduct the withholding tax of 11.5 percent at the time of recharge and some after each call in order to avoid shock to their customers. Each minute is charged on the first click of the second i.e., first second of the call is charged as one minute and first second of the second minute is charged as second minute – no matter how many seconds a minute you keep engaged the phone on call. The mobile companies reconcile call transfer rates in seconds and not in minutes.

Now only few people know that the mobile company has to pay a fixed amount of money to PTA i.e., normally a percentage of recoveries, as a royalty fee. Mobile companies pay Annual License Fee (ALF), R&D Fee and Annual Spectrum Fee (ASF). Moreover, the mobile company also contributes towards Universal Service fund (USF). Also last but not the least the mobile company pays corporate tax to the government. So the bottom line is that out of every PKR100 a subscriber of a prepaid mobile number contributes more than PKR50 to the national exchequer either directly or indirectly.

At the start of the year 2011 there were around 100 million mobile phone subscribers. The subscribers are increasing at a fast rate as at the end 5 million

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more subscribers were added to the year start 100 million figure making it to 105 million in total. Let us assume that on average a normal mobile subscriber makes a recharge of around PKR500 a month. Now we can easily calculate how much money the Government makes out of this mobile phone business.

There was a time when messaging was for free on mobile phones but later billing mechanisms were created and now the mobile phone companies are minting money through mobile phone messaging. However, there is no policy to control spam messaging. Organizations have started to use mobile phone messaging as an

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advertising tool. Some people might consider it a valuable service, whereas some conservative users might not like to surrender their telephone inbox space for unwanted corporate advertisement. Options should be given to block spam messages or impersonal corporate advertisements.

Now a days the mobile companies have started charging even the calls to their

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help centers. This does not seem to be a right thing to do when these mobile companies make a lot of money from subscriptions alone.

It amazes me how value-added telecommunication services are used to rip-off customers and even the Supreme Court is silent on this massive plunder. We can only hope that subscribers will become aware of their rights in the near future and do not let the Government and the mobile companies take undue advantage of their ignorance.

  3 comments for “Ripping Off Customers through Value-Added Services

    June 1, 2011 at 6:57 am

    I am sorry to read that you have been taken for a ride by PTCL although I will be cautious though while learning from your experience. Thanks for sharing.

    June 2, 2011 at 4:50 am

    My pleasure Sir… I feel purpose of this blog is fulfilled after reading your comment… EVO 3.1 performs just like EVO-Nitro, the difference is you have to pay PKR1000/- less as monthly charges… The question is how much we can save ourselves from mobile phone call non-value-adding charges… Only PKR64 are left for the user right after recharge… What a shame… A considerable portion again goes to Govt. kitty… Beats the very spirit of a ‘value-added’ telecommunication service… No value added for atleast PKR50 only partial value is created for the rest of PKR50…

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