On Wateen’s request, we are publishing their point of view in the following paragraphs, but before we jump on to their version, we would like to discuss their claim about franchise business viability and customer satisfaction.
Reservations of Franchisee
Wateen franchisees confirmed that after company’s re-launch, they were told that company was going to change the sale model. Since Wateen did not have the new stocks of CPEs, therefore, franchisees were supposed to recover the old equipment and re-sell them in their respective areas.
According to a franchisee, “it wasn’t a policy by choice but since we have invested so much, we didn’t have any other option but to accept it”.
Under the new mechanism, franchisee recover the old equipments (CPEs) and send them to Wateen facility from where Wateen re-allot the equipment to franchisees all over the country.
Normally, a regular franchisee is getting 60 to 70 CPEs on average against 300 CPEs that a franchisee must get to break even the monthly operational expenditure which is Rs. 250,000 to Rs. 300,000. Hence, for over last 5 months, most of Wateen franchisees are falling short of their monthly investments by a big margin. Worst case is, whatever sales they are making on the basis of recovered/recycled equipment, it is only being recorded in company’s worksheets and no monetary benefit is being passed on to the franchisee.
To further, deteriorate the situation, Wateen has reduced the upfront commission on the new connection from Rs. 1,400 to Rs. 700. In April 2012, Wateen communicated that it would compensate this loss by increasing the percentage on Top-up from 3% to 9%. Till today, the new commissioning mechanism is still pending and it hasn’t been implemented.
Almost all the franchisees we contacted raised somewhat similar questions;
- New devices have been stopped and upfront commission has been reduced by one half
- How many old devices can be recovered from the respective areas and what kind of viability can be maintained by selling only 50 to 60 devices
- Although it has been told that commission on Top-UP will increase but we (franchisee) can only sell that balance to our closed friends and most loyal customers. Normally people recharge accounts by purchasing a Prepaid Card. Therefore, this offer is still not viable to us.
We were further told that in May 2012, Wateen recovered some 4405 old CPEs from all over Pakistan through its franchise network. But most of the stock was re-allotted to those franchises who are either friends or relatives of someone in the management. We came to know that franchises such as Chimera, Nobel and Firelinx meet this criteria.
- Despite the claim, more than 100,000 customers left Wateen’s network during last one and a half year.
- Wateen says, it stopped selling outdoor unit because it was not cost effective and gave an impression of fixed line broadband but in the following paras it says, it re-sells the refurbished outdoor units when they are recovered from old customers. Despite of reinstalling 200 WiMax sites, why it still needs to re-sell the refurbished equipment?
- In recent months, due to sale of refurbished CPEs, customer complaints have increased. Whenever a Wimax customer finds the CPE faulty, Wateen charges him/her Rs. 500 for another refurbished CPE.
- On June 29, Wateen launched a scheme with Intel Pakistan which says, whoever buys certain Intel based laptops will get free WiMax connection and 3 months line rent waiver. It is not sure, without new stock is it commercially ok to launch such offer.
Wateen Telecom and its management would like to clarify its position with regards to statements made in More Magazine by Mr Mudassir Jehangir in the article, ‘Wateen stops selling WiMAX connections’ dated 7th July, 2012.
Contrary to the claims made in the article, Wateen Telecom has not stopped selling new WiMAX connections. In fact, Wateen’s new policy for sales aims at enhancing customer service and retention by reviewing the network coverage in a particular franchisee’s area before any new connections are sold. This policy was an initiative of the new management and came into effect after the re-launch of the company last year.
As readers of More and others interested in the telecom industry will know, prior to its re-launch Wateen Telecom faced much criticism from customers about service levels and coverage. The decision was therefore made, in collaboration with the franchisee network, to revise this policy.
The management revised the sale policy at re-launch to ensure no sales were made without verifying the coverage in the area.
The franchises were asked to ensure that the customer of each sale had to be contactable, reachable and recharged their connection after the sale was made.
On top of this, franchisees are being paid a specific percentage of revenue as part of the retention scheme so that they can further invest in their business and customers to ensure follow-up visits and periodic customer satisfaction surveys are made by their teams.
We aim to provide the best service possible and our franchisee network is fully on board with us regarding this policy of new sales.
Another issue raised by the respected magazine is that the company has shifted its strategy from outdoor devices to indoor ones. Initially, the company used to sell outdoor units, which were like fixed connections, but were more expensive to import and did not offer the convenience of using WiMAX on-the-go.
As part of its re-launch, the company re-installed around 200 of its sites to improve its coverage. As per research at the time, potential customers wanted devices that would offer the convenience of on-the-go connectivity or built-in Wi-Fi routers. The company negotiated contracts with reputable international vendors, such as GreenPacket, to provide the latest and best quality equipment to customers.
This meant that the ordering of new outdoor devices was stopped. Only the recovered and refurbished outdoor units are floated in the sales channel and provided to customers upon availability.
Wateen has invested in its franchise network as a business partner and intends to ensure that it continues to support the viability of franchise businesses. This is why the management revised some policies to improve business viability.
Meanwhile, Wateen Telecom will continue to service new customers through its franchise network, its direct sales teams and through online sales channels.
We hope this clarifies the position of the company and answers any questions our valued customers may have.