HomeBusiness DigestMobile Operator Face off Could get Messy

Mobile Operator Face off Could get Messy

ZIMBABWE’S mobile phone operators have taken their fight for market share beyond the corporate drawing boards and promotional norms. The fight could get messy.

The past month has seen the two smaller mobile operators, traditionally laid back and content with whatever share of the pie they had, launch aggressive marketing and promotional campaigns in a bid to claw back some market share.
Telecel Zimbabwe, the smallest operator, is throwing in sneaky punches at Econet, the largest operator, promising its customers that the company is going “forward with confidence and renewed hope for the future” in an advertisement titled: “Do you remember?”
The advertisement reads: “Difficult times sometimes call for drastic measures, but as Telecel, we have remained true to our commitment to offer you a personal, quality service. During the challenging times, we kept you roaming, and our contract customers remained unaffected without switching of packages or being forced to pay something upfront. We believe this is what makes for our valued relationship — in good or bad times.”
This is a direct dig at Econet, which switched postpaid — telecommunications jargon for contract subscribers — to the prepaid platform at the height of Zimbabwe’s economic crisis.
Econet management took the decision in November last year to migrate postpaid customers to prepaid because the mobile operator could not invest in a new billing system at the expense of other key components of the network.
The decision ultimately saw Econet avoid exposure to defaulting customers, whereas its rivals were forced to discount outstanding bills in order to salvage something from defaulting clients.
“We therefore did not have negative exposure during the changeover to US dollars. An important point to note is that while the changeover to pre-paid had indeed caused great discomfort, it enabled our customers to have better control of their costs,” Econet corporate communications manager Ranga Mberi said recently. “For instance, corporate customers that had multiple lines on contract used the opportunity to trim the number of accounts on their books upon their return to contract, enabling them to have a firmer handle on their costs.”
Net*One, the state-owned operator, is also saying it is “the country’s number one”, and “making a splash with prices that are diving even lower for you”.
The company is the second largest operator in the country in terms of subscribers and claims its tariffs make it “the most economical network for our contract and (pre-paid) customers”.
Experts say reducing intra-network calls does not help Net*One much.
Because of Econet’s dominance — a 62% market share — the bulk of mobile traffic in Zimbabwe is to Econet. This means there is no real savings for Net*One subscribers, as Net*One still has to factor in the termination rate paid to Econet for calls going to its subscribers.
Econet, whose subscriber number stood at 1,2 million in February, intends to grow its capacity to 2,5 million by end of year. No reliable statistics are available on the subscriber numbers of Net*One and Telecel, but it is believed they command just over 700 000 between them.
Despite its dominance, Econet is not missing from the marketing fray, running its “Thanks a Million”, where it is celebrating signing on more than one million customers in a multi-million dollar promotion for subscribers.
A marketing blitz is expected around its 3G launch.
But Telecel and Net*One face an uphill task and need to roll up their sleeves in order to attract new customers if the players are serious in their bid to topple Econet as the market leader.
Econet and Net*One presented conflicting outlooks of the first quarter operating environment two months ago with the later singing the blues.
Econet on the other hand said the first two months of this year contributed close to 32% of the total revenue the mobile firm realised in the last financial year.
The mobile operator says beyond the two months, revenue continued to grow as new subscribers were added, but did not state the actual numbers, saying such information would be made available when the company releases its interim financial results this month.
Its major rival, Net*One said it was bearing the brunt of “economic hardships” and appeared sympathetic to its subscribers’ plight saying contract subscribers who accumulated bills in the first quarter of this year following the dollarisation of the economy had been granted some kind of reprieve.
Although Net*One did not issue distress calls, the company will be happy to salvage whatever it could after giving postpaid subscribers slight room to make calls following the dollarisation of the economy.
 “Net*One understands that dollarisation has affected us all. Taking into consideration the economic hardships, Net*One is giving you a 30% discount on bills incurred between January and March 2009, provided you settle that bill not later than 31 August 2009,” the company said.
 The company also put a cherry on top of the discount in the form of easier payment terms and credited customers who have already honoured their bills saying such subscribers would be automatically credited with a 30% discount.
 Net*one had given subscribers up to the end of this month to pay up.



Recent Posts

Stories you will enjoy

Recommended reading