Compex tarrifs have contributed to people getting lost in the huge offer, so they no longer understand what they pay for, says Artūrs Freimanis, ZetCOM Board Chairman. The company is mostly known for its pre-payment card Amigo. He told the business news portal BNN many people overpay for services that make part of the set they do no even use.
What is your assessment on the telecommunications sector in general, namely, how would you characterise the Latvian market to a potential client?
Speaking about the key trends, prices are gradually levelling out and operators no longer advertise the one and the only most economical offer.
Basically, prices have levelled out because operators come up with a number of complicated services users even do not now how to use. So, they no longer know what they pay for. To give an example, operators offer sets of services the user does not make full use of. Paying a fixed price for a thousand minutes if you actually talk only a hundred means you overpay significantly. This explains why mobile operators still make profit despite the crisis impact.
I also have to single out that more and more new services enter the market, for example, computing. It is a new source of income. Also, sometimes price increases are hidden under complex tariffs and, at first, it might seem these are bonuses, namely, never mind we have raised the prices, here is a little bonus for you.
Users usually take this as a move of taking care of them, but actually what they see at the end of the month is a bigger bill, which leads to them switching operators more often. This is what we saw every day on or Tvs – all the operators advertised zero tariffs.
Are there similar trends also in Estonia and Lithuania?
From the perspective of consumption, the situation is more or less similar. The share of pre and post payments is basically the same, so is the number of messages and talking time.
However, I should point out the closer the territory to Scandinavia, the higher the tariffs, as witnessed by Estonia, but the price gap is not that considerable.
What is the instrument to attract potential clients’ attention? Is it low pricesm the brand or something else?
Given the fact operators speak about prices all the time and they really are lower than in the rest of Europe, price fluctuations no longer play such a major role. Some clients value the brand, cost-effectiveness, while others count the number of friends with the same operator. I believe simplicity and clear services will matter.
Speaking about competition, mobile operators often complain about each other’s commercials. Also Amigo has gone through this, with Bite asking the Consumer Rights Protection Centre to assess your commericals. Are such complaints well grounded? And do comparative commercials asserting you have it cheaper really allow to attract clients?
What is important here is whether the consumer benefits from that. If an operator can really prove other commercials are misleading or a law been breached, consumers benefit from that. However, if someone puts the blame on others, it does not always mean the speaker himself is the good one.
Speaking about the case with Bite inviting people to join their nearly free of charge tariffs, we can see their financial performance is actually the same. They draw almost the same revenue from a single client as the large operators they are speaking about. Our aim was to show that people should not blindly believe all commercials and zeros they are promised.
What are the price trends in Latvia? Will communications still gain in future or they have hit the peak already?
Currently, quite a large share is derived from base services – messages and calls. This proportion will give way to data and content in future. The question is who will show this content and whether some third parties will be involved.
I believe these base services will not gain and there will be more and more sets of them – flat rates with one price for everything. Anyway, revenue will come from different sources.
What is the demand for Amigo services? Did the crisis have a negative impact on your prices and the number of clients?
The number of clients has not changed significantly during the past years, which could be some kind of a manifestation of the crisis. On the other hand, we will get the Census 2011 results soon and see how many have actually emigrated. So, operators are currently focusing on the existing clients.
How many clients does Amigo have and what are the forecasts? What are the key tasks you plan to accomplish this year?
A number of new services and tariffs offered by our competitors has made also us make plans of attracting clients more aggressively.
We plan doubling the number of clients to 200 000 if not this year – in 2012 we will succeed for sure.