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The post-paid dealers of Idea Cellular in Andhra Pradesh are protesting against a reduction in their commission by 50 per cent.
About 80 dealers of the company across the state have stopped selling the post-paid connections and providing services such as migrating the plans, billing enquiries etc since last Wednesday.
It is learnt that AirTel, the largest cellular operator in the state is also contemplating to reduce commission to its post-paid dealers. The company's chief operating officer confirmed this.
Idea Cellular was earlier giving a commission of Rs 1,050 per connection to the dealers at the time of sale, in addition to a Rs 300 commission after three months if the customer stays with the network.
It has now reduced this to Rs 400 at the time of sale and Rs 150 each after six months and twelve months respectively.
"We are offering Rs 400 to the sales personnel at the time of sale of a connection. Now, if we reduce it they will stop selling connections because commission is the sole income for a majority of them," one of the dealers said.
The issue arose because of the competitive packages being offered by the companies in the recent times.
Idea has introduced a monthly rental package of Rs 169 In June 2003, to which it received a overwhelming response.
In fact, over 70 per cent of its post-paid connections are being sold under this package for the last two months. The company realising that it can not afford to pay the commission at the same level as earlier, has slashed it by almost 50 per cent.
Interestingly, AirTel has also followed Idea by introducing a Rs 150
S K Subramanian, chief operating officer of Idea Cellular said dealers had not approached the company with the problem as yet. Any of the dealers who feel it inconvenient can negotiate with me directly to solve their problem, he quipped.
"We are currently offering Rs 800 commission on an average on our packages to the dealers. Keeping in view the drastic fall in the monthly rentals, we are now contemplating to reduce the commission amount shortly," K Srinivas, chief operating officer of AirTel said.
Cellular market in Andhra Pradesh has become hot in the recent times with AirTel, which was historically the second leading operator has surpassed Idea Cellular for the first time in April this year.
AirTel continued its dominance since then and added 21,500 customers in July while Hutch and Idea added 13,000 and 11,500 subscribers, respectively.
Survival of the fittest