It was short, sharp, inspiring and motivational. “Hi! You have been elected from Zain to text ‘WIN’ to 222 and play for N2 million CASH tonight! Grab this opportunity! Text WIN to 222 NOW! Costs N100/SMS.” This was the short message service, SMS on the mobile phone of Kenneth Onyewuchi, a cargo clearing agent at the Ikeja Airport, Lagos. The SMS from Zain Nigeria, one of the GSM service providers, was all he needed to realise his dream of becoming an instant millionaire, or so he thought. To grab the opportunity, he quickly rushed to a nearby recharge card vendor where he bought a N2,000 recharge card since he had only N50 in his account.

With his account balance now standing at N2,050, Onyewuchi started texting ‘WIN’ to 222 as instructed. With the hope that the more text messages he sent, the better his chances of smiling to the bank with N2 million, he repeatedly sent text messages until he used up the N2,000 recharge card he bought without success. At a point, his service provider sent him another SMS congratulating and encouraging him to send more, explaining that he needed just few points to qualify for a draw that would ultimately make him a millionaire. “I never gave up; I continued buying more recharge cards until I realised I had used up a total of N25,000 in just two days,” he told the magazine, last week.

The clearing agent, however, said he realised, to his surprise, that his dream of joining the millionaires’ club via the text & win promotion was bait by his service provider to fleece him of his hard-earned money. “I lost N20,000 to the scam passed off as a promotion,”

he lamented, adding, “there was no way I could not have participated in the text & win promotion, not with the promising tone of the SMS.” Onyewuchi said that although, he lost N20,000, some of his colleagues and relations who are customers of other GSM networks lost huge sums of money. He recalled, for instance, his colleague in the office who lost N300, 000 to MTN Text & Win promo in one fell swoop.  

Onyewuchi is just one out of millions of telecoms consumers caught in the frenzy of text & win promotions by telecoms service providers particularly the three big GSM operators namely, MTN, Zain and Globacom. Each of the operators is at present, engaged in one SMS-based promo or the other. Each SMS-based promo from any of the service providers come in variations - all in short, sharp, inspiring and irresistible tone urging consumers to participate for a fee of between N50 and N200 per SMS.

For instance, since Zain started running its SMS-based sales promotion tagged: ‘Wake up a Millionaire’, in which the GSM network provider is urging subscribers to send WIN to 222 at the cost of N100 per SMS, its subscribers have been receiving several text messages such as ‘Congrats! You have been chosen to participate in the Zain rewards programme. Just send REWARDZ to 797 for free to register. Visit www.ng.zain.com for info,’ ‘Na luck dey knock on your door! Text WIN to 222 NOW and you fit win N2 million CASH from Zain! Costs N100/sms,’ and ‘Abeg wait! You fit keep secret? You don dey among the lucky people that can win Zain’s N10 milli

million in a few hours! Simply text WIN to 222 now! Costs N100/sms.’

Globacom, second national operator, has also been inundating its subscribers with similar SMS-based promotions since late last year when it ended the Glo Text 4 Millions promotion, in which subscribers were asked to send “WIN” to 555. Some of the text messages from Glo include ‘Dear Customers, get FREE N400 Glo to Glo bonus if you use N3000 or more btw 1^st & 31^st May. Don’t miss this offer! Rule your world,’ ‘Dear Customer, get FREE N400 Glo to Glo bonus if you use N700 or more btw 1^st & 31^st March. Don’t miss this offer! Rule your world,’ and ‘UEFA Semi Finals on 20^th /21^st April. Inter vs Barca and Bayern vs Lyon. Another exciting moment! Text UCL to 5836 for live update. SMS cost N50/week.’

From MTN also comes a barrage of SMS-based promotions such as: ‘Stand a chance to win a free invite to MTN Sponsored Hip Hop Awards 2010. Send MTN HHWA to 35120 from an MTN XtraCool line. 1^st 100 SMS wins! SMS costs N100,’ ‘LAST CHANCE! MTN wants you to contest for N2 million cash in a few hours! You can make your dream come true! Text Go to 2010 to get in the draw! Costs N100/sms,’ and ‘What else do you want? MTN says you could win N20, 000 cash in a few minutes & N2 million tonight! Simply text GO to 2010 to put your name in the draw! Costs N100/sms.’

Even some code division multiple access, CDMA operators have joined the fray. For instance, in what has been dubbed a season of t

text & win promos in the telecoms industry, a message from Starcomms Plc reads: ‘Would you like to start each day with Prayer and Bible Quotes? Send PRAYER to 33115 for daily Prayer and BIBLE to 33115 for daily Bible @ N100 for 1 month.’ Another one said, ‘Now get friends wall updates on facebook without logging onto the internet, simply from ur Starcomms phone. SMS “FB upd” to 33397 @N8/sms.’

The magazine learnt that the rash of text & win promos by service providers is part of a desperate marketing strategy aimed at shoring up revenue base at a time the current global financial meltdown has forced consumers to drastically reduce their spending on phone calls, resulting in serious shortfall in revenue profiles of operators. A telecoms expert informed the magazine that the global financial crisis, compounded by the cash crunch induced by the reforms in the banking sector, actually forced consumers to cut down on the amount spent on phone calls.

According to the expert, who declined to be mentioned, many people have already reduced the number of phones they use from three to one in order to reduce cost. The result, he said, is that there has been serious decline in operators’ average revenue per user, ARPU, which is the industry barometer for measuring profitability. He said that the text & win promos is operators’ way of encouraging subscribers to spend the same money via SMS they are now reluctant to spend on voice calls. He said that although, many consumers have been lucky, winning several millions of naira, majority of them have not been particularly lucky.

This, perhaps, explains

why the rash of such promos have now become a source of concern to consumers, stakeholders and even the Nigerian Communications Commission, NCC, industry regulator. The argument is that operators are hiding under the cover of such promos to defraud gullible consumers. For instance, Deolu Ogunbanjo, president, National Association of Telecommunications Subscribers, NATCOMS, a consumer rights advocacy group, accused operators of using the text & win promos to bleach subscribers. He argued that in civilised countries, promos are usually done to appreciate loyal customers but in Nigeria, it is the other way. To him, the season of SMS-based promos is an opportunity for operators to make more money hence, the exorbitant charges subscribers pay for the SMS.

Ogunbanjo told the magazine that the NCC had on August 12, 2008, organised a consultative forum on reduction of SMS tariffs. He said at the forum, Ernest Ndukwe, former executive vice chairman of the NCC stated that SMS is free in countries like Ghana, The Gambia, Australia and Switzerland. He said it has taken the NCC almost one and half years (18 months) to graduate SMS inter-connect rate as follows; from December 31, 2009, but effective January 1, 2010, SMS inter-connect rate would be N1.94; from December 31, 2010, but effective January 1, 2011, SMS inter-connect rate would be N1.63; from December 31, 2011, but effective January 1, 2012, SMS inter-connect rate would be N1.32; and from December 31, 2012, but effective January 1, 2013, SMS inter-connect rate would be N1.02. “Why is SMS not free also in Nigeria, considering the volume of subscribers in Nigeria?, he asked.

Ogunbanjo accus

accused the NCC of complicity in the SMS promo saga since, according to him, the commission failed to act when it ought to by curbing the excesses of operators who are making billions of naira. “The Nigerian situation is pathetic, particularly with absence of avenues to seek redress, he lamented, adding, “I have no doubt in my mind that Ndukwe allowed operators to have their way because he was one of them. He was the president of the Association of Telecommunication Companies of Nigeria, ATCON before he was appointed the EVC of the NCC, so he does not want to rock the boat.”

The season of text & win promos has also not gone down well with Sola Salako, frontline consumer rights activist. She is particularly concerned with the processes many of the promotions employ to determine participation. According to her, the most common is to encourage the consumer to make a purchasing decision to qualify. For instance, she said as simple as text ‘win’ to a short code like 222 or 5000 at N50, N100, and N200 or save N10,000 in your account within a certain period and qualify to participate may be, it raises a lot of questions. “What is the focus of the promotion? Is it a loyalty platform or a sales drive? she asked.

Salako noted that although, most brands claim it is a means of rewarding loyal consumers, she wondered how operators could claim to be rewarding consumers for past business yet consumers have to spend something again to have a chance at the supposed ‘reward.’ “The exploitation of consumer vulnerability is massive here. By global consumer practice, consumers should not

not pay any extra to participate in a promotion where their options of winning are determined by chance. It is termed as illegal lottery. A lottery is a promotion that consumers pay a token to participate in a chance draw. A sales promotion is when consumers make regular purchase decisions at regular prices and their decision within the period qualifies them to participate in a chance draw,” she argued

As far she is concerned, “the only promotions that can charge more than regular purchase decisions are the ones that require some skills from the consumer e.g. answer 5 questions to qualify for the draw where the draw is also determined by some skill display e.g. a shortlist of 20 people who would answer more questions to emerge winners (like Who Wants to be A Millionaire). Once skill is involved, it is no longer a lottery. However, a critical appraisal of most promotions running shows that the consumer is rarely required to show any skill, yet he is charged a premium to participate in such promotions. That is illegal lottery.”

Sam Okereke, an MTN subscriber, also took a swipe on operators, accusing them of masquerading under text & win sales promos to defraud consumers. He observed that the fact that operators prefer to inundate subscribers with such tempting and unsolicited text messages immediately the subscriber checks his account balance or recharges his phone is an indication of their (operators) desperation to fleece consumers. He also pointed out that apart from the fact that the content of the text messages is not any different from the ones sent by advance fee fraudsters, otherwise known as ‘419’, the season of

of text & win promos has actually opened the floodgate for 419 people to lure consumers into parting with huge sums of money.

1. The situation, Okereke said, forced virtually all telecoms operators to issue fraud alerts to their subscribers, warming them to beware of faceless and unscrupulous elements asking them to part with certain amount to redeem one non-existence bogus prize or the other. He said that a good number of gullible subscribers have fallen prey to such scams by supplying details of their bank accounts via fraudulent websites which they were asked to visit to redeem their prizes.   

But the NCC is not unaware of the upsurge in SMS-based sales promos. The issue was top on the agenda of the last Telecom Consumer Parliament held in Lagos recently. Participants at the parliament took turns reeling out their ugly experiences with the prevailing season of SMS-based sales promotions which they described as fraudulent. Apparently appealed by the unsavoury accounts of victims of such promos, Ruben Muoka, spokesman of the NCC, said that the commission was concerned by the upsurge of such promos. “We are concerned about it. We want to meet with the lottery commission and the Consumer Protection Council, CPC. A lot of people make several complaints,” he said, adding that the NCC is looking at ways to harmonise the SMS-based promos and make it pure promotions.

Attempts by the magazine to get the reaction of operators were not successful. A reliable source, however, said that operators actually secured prior approval of the NCC before coming out with such promos and that the terms and conditions for participation are c

are clearly stipulated. The source, who declined to be mentioned, argued that consumers who participate do so willingly, with detailed information and with the hope that they would win. He also said that the cost of the SMS is also a business decision, which went through regulatory approval.

What this means is that the buck stops at the NCC which concerned stakeholders and hapless consumers expect should harmonise the SMS-based promos and make it pure promotions as promised. But until that is done, operations would continue to smile to the bank with billions of naira proceeds from such SMS-based promos at the detriment of consumers.

 

 

Ogunbanjo: Accuses operators of ripping off subscribers

 

Salako: Concerned about operators’ exploitative method

 

Okereke: Takes a swipe at operators

Ndukwe: Former executive vice-chairman, NCC