Since the beginning of the year, the Federal Antimonopoly Service (FAS) has recorded an increase in the number of complaints about unfair actions of telecom operators. The service recommended changing the “controversial practices” that operators use against competitors. For example, operators have reduced the maximum call duration to VimpelCom numbers from 30 to 20 minutes, as well as the dial-up time from 20 to 13–15 seconds. The companies claim that they act within the framework of the law.
Based on the results of the expert council meeting on June 10, the FAS issued recommendations to telecom operators “on adjusting controversial practices in order to create a fair competitive environment,” the service told Kommersant.
“Since the beginning of the year, the department has recorded an increase in the number of complaints about unfair actions of telecom operators,” the service added.
The service representative did not specify what exactly companies should do.
In November, Kommersant wrotethat MegaFon, MTS and T2 opposed VimpelCom’s shares, since, according to the operators, they violate the existing “mutually beneficial balance of interests” and are aimed at “causing losses” to other operators. VimpelCom then promised subscribers that it would pay 50 kopecks. to the mobile phone account for every full minute of conversation if the subscriber answers a call from another mobile operator.
Telecom operators pay each other to terminate a call to their networks (interconnect). The more calls from other companies are completed on the operator’s network, the more money he receives. The average interconnect rate on the market is about 1 rub./min. In 2010, Tele2 (now T2) recorded a sevenfold increase in the costs of calls from its subscribers to MTS numbers after the “Bonus for Incoming” campaign and filed a lawsuit for damages. Then in 2011, the FAS recognized MTS as a violator of the law on protection of competition after carrying out a similar action. As a result, MTS and Tele2 reached a settlement agreement.
VimpelCom says that their promotion is needed to attract new customers and “increase loyalty through the provision of bonuses.” “This action is neither fully nor in any part aimed at causing losses to other market participants. Its goal is to introduce economically sound, transparent and consumer-oriented solutions that increase the consumer value of communications and promote rational, informed choice,” says VimpelCom, adding that “such activities comply with current legislation.”
At the same time, the company believes that reducing the period of time during which a subscriber can pick up the phone and the duration of the call has an extremely negative impact on the customer experience.
In addition, at a meeting of the expert council, representatives of VimpelCom complained about the retaliatory actions of competitors, an interlocutor familiar with the meeting told Kommersant, and was confirmed by two more sources in the telecom market.
According to Kommersant’s interlocutor, representatives of VimpelCom said at the meeting that MegaFon had reduced the maximum duration of connections to VimpelCom numbers from 30 to 20 minutes in Moscow and to 25 minutes in the regions, and MTS and T2 had reduced the dialing time to VimpelCom numbers from 20 to 13–15 seconds.
T2 “Kommersant” explained that they had reduced the duration of the call to 20 minutes, but assured that they had not changed the duration of the beeps.
“The duration of calls and beeps is not regulated by law. At the same time, operators strive for parity in relation to each other. As a rule, any of our actions are in response to the actions of another operator,” MegaFon explains, adding that due to VimpelCom’s actions, their costs for passing traffic to their network have increased.
The operators interviewed by Kommersant refused to disclose the amount of losses from the actions of competitors.
The promotion upsets the balance that has developed in the market since 2011, says a T2 representative. “A player who violates the market equilibrium and the rules of work established by the antimonopoly authorities, covering up commercial aspirations with concern for the client, should not count on the fact that his actions will not entail retaliatory measures from other participants. This is at least naive and at most irrational from the point of view of long-term business logic. “The Big Three are looking forward to the FAS decision on the topic,” the company says.
MTS declined to comment.
“The absence of a decision from the FAS on VimpelCom’s unfair practices leads to the fact that operators begin to defend themselves with their own means,” says a Kommersant source in the telecom market. “The practice of artificially increasing interconnection is detrimental to the market, as it affects pricing and the final cost for subscribers of all operators,” says another Kommersant source in the market.
In general, aggressive competition gives advantages to subscribers – operators are ready to offer services up to unlimited prices at very low prices, says Konstantin Ankilov, managing partner of TMT Consulting.
“Now VimpelCom uses a whole palette of services and promotions to attract subscribers, trying to increase its subscriber base, attract the attention of users and increase subscriber loyalty. Operators always publicly or non-publicly respond to the actions of competitors, coming up with countermeasures, especially to any serious initiatives of competitors, since all operators need to reduce the outflow of subscribers,” explains Denis Kuskov, CEO of the TelecomDaily agency.
