Mobile phone promotion – rumours and bad planning

In the past few years, Malawians have witnessed cut-throat competition between mobile phone operators Celtel Malawi and TNM Limited in terms of marketing, promotions and roll-out of value-added services. Users have also joined in with accusations and counter-accusations flying around that copycat tactics are employed by the two when rolling out services and promotions. The recent mobile phone promotion of low-cost handsets is no exception.

Rumour has it Celtel Malawi were the first to conceptualise the idea. It is said they plan to sell as many as half a million low-cost sim-blocked handsets in an effort to prop up their market share. The same rumour says Celtel Zambia recently rolled out a similar scheme using similar handsets. Another rumour, however, says TNM were the first to think of the promotion but that Celtel beat them at their own game. Whichever rumour is true or not is beside the point here. The point is that someone may not have necessarily done his homework very well.

The promotion

Celtel announced that they would be selling a Chinese made handset for K3,900 in all it’s shops, at filling stations and even at agricultural input outlets. The phones are network blocked and are, in my personal opinion, are actually quite cute. Concerns were expressed that being Zhing-zhong (cheap Chinese products), these handsets would not last past a few days and as such the promotion would fail. The reality on the ground was very different with large queue’s being witnessed inside Celtel and other shops for the product. The alien name of the handset (one person comparing it to a Swedish car number plate) didn’t deter many people from owning a handset.

The twist

A few days later TNM brought out their product, a K4,700 Nokia handset set to counter the Celtel offering. They touted their handsets as being more robust as compared to an unknown Chinese brand. They quickly put Celtel on the back foot. Or did they? A certain section of private handset traders cried foul. The handset TNM was selling retails locally for around K7,000, some K2,300 more than the promotion price. The traders saw red. They saw little or no sales at all until at least the whole promotion was over. And then that would really depend on when Celtel decided to pull the plug on the mobile phone promotion as they have more handsets to sell than TNM. As is now tradition, TNM would have to run their promotion for as long as their rivals did. Next thing we hear is that there are no more TNM handsets on the market. Rumour has it staff as well as the traders have bought the handsets en-masse and are selling them on the open market at their ‘normal’ retail price of K7,000.

Whether this rumour is true or not, someone somewhere may not have done his homework very well.