Caught in a loop

Madhav Garodia has been a much sought after man in the last few days. Not that he revels being the centre of attention. That’s because the people giving him an undue share of attention belong to telecom companies, or represent their sales agencies. Every week he gets dozens of “pesky calls” or “embarrassingly polite requests” from Vodafone and Idea, all wanting him to switch to their respective networks.

Garodia happens to be one of the loyal Loop Mobile subscribers who were among the earliest to join the network, when it went by the name of BPL Mobile, one of Mumbai’s first mobile phone service providers.

And the fact that Garodia was a cellular phone subscriber when mobile phone call rates were Rs 16 per minute for outgoing calls and Rs 8 for incoming calls, make him even more special.

He’s not just loyal but also what telecom service providers call, a high ARPU (average revenue per user)-generating customer. And ever since news broke that Loop Mobile would be shutting operations in November and selling its assets (primarily consisting of a high ARPU subscriber base) to Bharti Airtel, the service provider saw an unprecedented increase in poaching by rival telecom companies.

According to industry body COAI’s (Cellular Operators Association of India) statistics, Loop Mobile had 3.03 million subscribers as of September 2014. But that number is drastically coming down as we speak.

Every time subscribers such as Srini K, another Loop Mobile customer, calls his friends who are Vodafone subscribers, he gets an automated message instead of a ringtone, asking him to switch to the Vodafone network. Various reports say that of the total number of subscribers (under 2.5 lakh) who have ported out of Loop Mobile since January 2014, a significant 40 per cent of them have gone to Vodafone. Less than 20 per cent of those leaving Loop Mobile have migrated to Airtel, the provider which is reportedly in talks to acquire Loop Mobile. And while the deal has not yet managed regulatory approval, there are scores of customers like Srini or Madhav who are still deciding whether it’s wise to wait till Airtel takes over their existing service provider.

But there is nobody from the company they can talk to. “Nobody answers the call centres. The company galleries are closing down one by one,” says Srini. “Pardon my pun, but nobody has bothered to keep us in the loop,” says Madhav.

Loop Mobile presents a compelling case study on customer retention, when the business is up for sale. After all, a bulk of the valuation (reportedly Rs 700 crore) of the business is on the back of Loop’s promising subscriber base consisting of mainly post-paid customers, a minuscule percentage in the Indian telecom sector.

Loop Mobile has its own constraints. Its owners won’t put advertising money in a brand that will shut operations after its licence expires in November 2014. As Srini and Madhav observe, the customer-facing executives of the company who sit in the call centres or company showrooms have already quit or are in the process of quitting – certainly bad times to expect any kind of customer service. Is the ball in Airtel’s court?

If you were the marketing head of either Loop Mobile or Bharti Airtel, what would your strategy be? Do write your analysis in 300-400 words and send it to us on cat.a.lyst@thehindu.co.in or tellcatalyst@gmail.com . The best responses will be carried in our forthcoming issues.

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