Redtone : empire strikes back



Maxis launched Voice Away recently which caused stir and panic among the players. Many are worry that things would be taken away just like that, in an industry where there is almost no margin left to be wasted.

Maxis’ Voice Away offers the following features:
Special rates: (STD-handphone = 0.15/min)
Commission
More than 250 K (sales generated) = 18%
More than 100 K but less than 250K (Sales generated) = 10%

Target Customer:
Corporate, SME and businesses which require making constant phone calls to mobile numbers.

Problems:
As reseller, you have to provide service to customers in term of auto-dialer maintenance. The auto-dialer is a device which acts as an extension to the normal phone that would redirect phone calls to Maxis’ gateway for this service. Under normal circumstances, the principal should take initiative to provide technical service for everyone and not to depend on the resellers because of the following reasons:

1. It is costly for reseller to provide for such service when the margin is thin.
2. Resellers are not skilled enough to troubleshoot faulty devices.

Maxis should follow footsteps undertook by Dell, which is to provide customer service to customer end-to-end. Nevertheless, perhaps financially they need to justify for the 10%-18% of commission given out to the resellers. But what about the question of royalty?

I recently met a company who organizes a commission structure where the margin auto-decreases until it become zero. This according to the spoke person, is a way to encourage resellers to work harder and keep working. Well, of course I understood that, it is marketing strategy, everybody passed their MBA with flying colors anyway when it comes to making money.

Thus, Voice Away is aiming(the bullet) at companies like Redtone, Exticom, Level One communication and etc which also has huge market shares in alternative corporate telephony service. We called it alternative because TM (Telekom Malaysia) is the main guy here, everything would benefit TM (Telekom Malaysia) since you need to have a decent phone line to benefit from the alternatives.

Redtone hasn’t followed the path of lowering the rate for STD-Mobile. One of the reason is probably its management believes that there is
no more margin to be given away and Maxis is just cutting a hole through its pocket. Recently, they countered attack again by offering “travel phone” and broadband service. They made a press awareness through The Sun with a strong message that it is bucking up to compete with Maxis and TM.

The funny thing with Telco is that their corporate web sites are always outdated. If you look for “voice away” from
Maxis Corporate site, you will get nothing. On the other hand, looking for “travel phone” from Redtone corporate site also return nothing, in fact there isn’t any search function available. This is what they mean by “is there but not there”. Anyway, I have reason to believe that “travel phone” is a roaming service for traveler who frequent overseas. This is a niche where there isn’t many players contributing to, only TM’s Ring Ring card does that. But the good thing is actually the fact that even foreigners can pretend to be Malaysian by using the roaming services if it is going to be cheaper than what is offered at the other end.

Fair enough, I know why. In this industry, it is harmful to expose detailed information when all your competitors would be watching your back all the time. If you look at the rates table given by Redtone, which I can’t find it now!. There is a saying that goes “If you know how to make money, don’t tell anyone”, but blog it to create claim for originality!

Therefore, it is only when blogger like me posted up something which get the information diluted better. But I am not committing any confidential breach, what I am doing is just to collect information from bits and pieces and upload it to the Internet. Besides, the traffic volume of IT-Sideways is nothing fantastic, so please don’t hate me for that.

Okay, coming back to our discussion. Redtone counter attack with a
press clipping. There must be a reason for that and from the news, of course it is not stated what is the reason.

Nevertheless, there is something excited about Redtone that is coming to the society in the near future; Mobile Money. To tell you frankly, I like the idea of Mobile Money, I think it is fantastic.

To find out why, wait for my next few blogs.


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