At an analysts’ briefing this year, Econet Wireless executives vowed they would not carry out promotions, come rain come thunder, arguing there was no need to take that route.
Report by Chris Muronzi
After Telecel, the country’s second largest mobile phone operator (by subscribers), and NetOne, the smallest operator, launched promotions for both voice and data services a few months ago, Econet Wireless, also the largest operator by coverage, sat back and hoped the promos would fizzle out.
The company was wrong. With close to 8 million subscribers on its network, Econet was getting cozy and did not remotely consider joining the promotional bandwagon, save for its rather lacklustre bonus points promo.
Under the promo, a subscriber on Econet would have to spend US$50 to get 500 points, which translated to just a US dollar’s worth of air time or equivalent in data bundles.
Now, Econet has joined the party; albeit a little late. It is now running a promotion which gives voice users percentage discounts of up to a massive 99% in some instances under its Buddie zoning promotion.
Although this is not a new concept on the African mobile phone telecommunications landscape, the move could endear Econet customers to the network.
Econet has largely borrowed from South Africa’s MTN Zone promo, a pay-as-you-go price plan that offers value-for-money. With MTN Zone, a subscriber can get up to 100% discount on calls and SMSs to MTN numbers plus great discounts on calls or SMSs to other networks.
But Econet’s competitors, particularly Telecel, have already clawed in their market share, judging by the growth in subscriber numbers.
Telecel, the second largest mobile phone operator, now has 2,4 million active subscribers from 1,8 million in March.
Telecel spokesperson Francis Chimanda admits the promos have helped the business grow subscriber numbers.
“Our promotions, like most promotions, are designed to create value for Telecel as a business and for meeting our subscribers’ product and service needs. Our most recent promotions, like the Mega Promo, have indeed helped increase our market share, visibility and subscriber numbers,” said Chimanda.
“The very nature of a promotion increases the amount of communication and marketing activity in order to raise awareness. And in our highly competitive industry, promotions are very healthy ways of improving your brand positioning against competition.”
Analysts attribute the growth in Telecel’s subscribers to the fact that many people have either migrated to Telecel or acquired its subscriber identity module (Sim) cards to cash in on free bonus calls under the mega juice promotion.
Econet’s earlier move to offer a points promo was no match for Telecel’s Mega Promotion, which offers bonus voice calls. But the game changer was still to come.
NetOne, the smallest operator, went all out and offered an even bigger and better deal; free talk time to its subscribers that made EcoNet’s promo look like child’s play.
Under its dollar-a-day reloaded promotion, which ends on December 31, a US$1 air time recharge gets a subscriber on NetOne an hour of free chit-chat on the same network. With a US$5 recharge, a subscriber can talk for five hours. But there is a catch; all free calls start from 6 pm to 6am and only after the airtime has been exhausted. The promo also extends to data users who get an extra 1MB free.
On the other hand, Telecel is also not letting up; the company on Friday launched another promotion, Mega Magic, where customers now receive 100% bonus airtime whenever they use a scratch card or electronic voucher to load airtime, no matter what denomination card they use.
Customers also receive free SMSs whenever they load airtime worth US$2 or more. The bonus on-net airtime and SMSs were introduced last Friday.
The Mega Magic Promotion effectively extends the 100% bonus that customers obtain when using the one dollar Mega Juice card to all Telecel airtime scratch cards or vouchers.
The number of free SMSs, for text messages to other Telecel subscribers, varies according to the value of the card, ranging from six SMSs for the US$2 card to 60 SMSs for the US$20 card.
Econet is feeling the heat. In its half-year to August 31, the company’s operating profit margin came out at 35%, down from 38% in the comparable period last year.
This, analysts say, is because margins have come under pressure as price competition amongst the networks intensifies.
Econet however managed to maintain the lion’s share of the market, commanding 72% of mobile call traffic. Telecel had 17% and NetOne 11%.
Analysts say although Econet has demonstrated it is capable of outcompeting its two rivals in mobile telecommunications, at least as measured by market share, the company needs to be competitive on the price front.
Zimbabwe’s telecommunications giant seems to have now realised this.
Just this week Econet Wireless announced it had linked up with its South African counterpart, Econet Wireless South Africa, to provide the cheapest rates for calls from South Africa to Zimbabwe ever.
The service, which is called “Call Home”, now allows Zimbabweans in South Africa to call home during the evenings for a low rate of R2,25 per minute with pure per second billing. The standard rates from other operators in South Africa are R3,99 from Cell C, R4,89 from MTN and R3,90 from Vodacom, the company said.
This could be exciting for Zimbabweans in South Africa, but Econet’s millions of subscribers, at least the low-end ones, want promotions that help the pocket.
Telecel Zimbabwe subscribers can make phone calls to 23 international destinations at 24 US cents per minute – the same price as a standard local mobile phone call – at any time of the day or night.