Call-drop for tele-marketers

Callers trying to sell insurance, SMSs offering cures for bald patches, cheap holiday packages and education consultants could be a thing of the past, after stricter tele-marketing norms come into effect from September 28.

The new regulations ban promotional calls of any kind, and also SMSs if a mobile subscriber has registered on the Do Not Call registry.

Unless a subscriber specifies that he would like to receive certain promotional offers, those who send SMSs can be fined as much as Rs 2.5 lakh.

While this may bring relief to subscribers, a number of businesses that depend on this form of communication will get affected.

"Companies which are in financial trading like insurance sales, or brokerages acquire businesses through tele-calling. They will have to change their business model," said Rajiv Hiranandani, the co-founder of Mobile2Win, an application maker for mobile marketing.

The new norms will also affect companies that use SMS as the medium to communicate with their customers.

Dish TV, the market leader in direct-to-home (DTH) services which sends billing updates and other alerts via text messages, is looking at other methods to reach out to its customers.

"I guess we will have to communicate more through the screen now, and devise other innovative means. There is a lot of information that a customer requires from us, and these (new norms) are a deterrent," said chief operating officer Salil Kapoor.

While DTH players might have another strong medium

in their kitty, a number of other businesses do not. An industry expert says websites and businesses like Indiamart.com, a sourcing portal, depend on calling small businessmen in smaller towns.

"There might be no other way to reach them, so it will affect their business," said the expert.

Other smaller businesses like mom-and-pop stores, bakeries and wellness centres which send promotional texts, based on location-based marketing, could also be blocked.

Some other businesses which send regular text communication have already sent texts, asking their consumers to de-register from the Do Not Call registry, if they have to keep receiving the communication.

The norms, however, are not applicable to communications from banks, educational institutions, civic bodies and government communication.

Marketers are concerned even as these norms are applicable to those who are included in the Do Not Call registry and account for about 80 million subscribers, which is around 10 per cent of the total subscriber base.

"If the enforcement of these regulations is strict, the number of registrations can go up further. But if a consumer wants, he can specify the areas from which he would want to receive promotional information," said Hiranandani.

The changes also erode the brand equity for a number of companies, since the identity of the sender of the text message will appear as a numeric code, and no longer bear the name of the brand.

Experts think it will be a loss of good branding opportunity for retail chains, apparel houses, and fast food chains which send information on sales, and discount coupons via texts.