Guro-o: A threat to mobile sector?

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AFRICOM, one of Zimbabwe’s licenced internet service providers, under Zimbabwean telecoms regulations permitted to operate an internet-based voice network, has launched a low-cost voice over internet protocol (VoIP) application called Guro-o.

The Human Capital Telescope with Brett Chulu

A VoIP application is a software installable on devices such as smartphones, tablets and desktop computers, allowing people to make cheap voice calls over the internet.

Guro-o is a potential threat to the voice revenues of conventional global system for mobile communication (GSM) operators, the likes of NetOne, Telecel and Econet.

Guro-o’s apparent potency

Guro-o’s apparent potency seems to hinge on two strategic thrusts. First, it seems to offer a compelling affordability proposition. At a rate of six US cents per minute for Guro-o to Guro-o calls, this app makes our local GSM operators look like heartless capitalists for charging 23 US cents per minute.

Second, Guro-o has the potential to access the 11 million plus subscribers of our GSM operators by using established GSM mobile networks as hosts. Put graphically, Guro-o has the nerve and cheek to act as a parasite, destroying from within — this, without breaking any laws. How is that so? Just like WhatsApp, which has virtually destroyed the SMS income streams of our local GSM, Guro-o is simply enabling its users to squeeze more value from their internet data bundles. Smart, legal, but ruthless!

It would appear Africom made a strategic calculation that the trio of NetOne, Telecel and Econet would in all probability not launch rival apps any time soon as that would mean permanently dropping GSM voice call charges by as much as three times. Clearly, that would be suicidal, given the need to recoup their recent investments in telecoms infrastructure. You can’t change the DNA of a business overnight without incurring massive losses. So even if the telecoms trio would like to remodel their businesses, Africom would have exploited its head-start to develop and cement its brand equity in the new market space.

In addition, Africom’s executives could have been encouraged by public statements some of our local GSM operators that they would not be seeking to fight parasitic services such as WhatsApp. Buoyed by this apparent business olive branch, Africom could be expecting no backlash from our local GSM operators. Wouldn’t they be guilty of doublespeak, if ever they cry foul over Guro-o’s encroachment just because it’s a local initiative?

Guro-o is entering a competitive space where Skype and Viber have established a huge head-start. So, the natural question is: why would people in Zimbabwe, let alone, those beyond the seas, care to switch to a local upstart such as Guro-o? For Guro-o to become a household name, it needs more than a “local-is-lekker” headwind. The mobile telecoms app arena is an unkind international war zone, where real value is what wins hearts and minds.

Beyond the undoubtedly superior affordability proposition in which Guro-o routs the local trio by a factor of 3,83:1, does Guro-o possess the “it” factor to trigger massive uptake, upsetting our local GSM operators in the process? Low price alone will not do the trick — it only confers the right to play — winning is another kettle of fish.

Though in today’s picky global markets there are six customer-value litmus tests, we shall subject Guro-o to just two.
Customer productivity

Does Guro-o enhance customer productivity across the entire customer experience cycle (purchase, delivery, use, supplements, maintenance and disposal)?
The Guro-o app is downloaded onto a device whereas a customer who wants to use, say, NetOne has to go and acquire a SIM card. For Gur-o, “purchase”, delivery and installation are simultaneous whereas for a SIM card-based voice service, these three processes are separate.

In terms of use, both the app-based Guro-o and the SIM-based offer relatively similar dialing time. It is in the recharge area where differences in customer convenience and productivity are quite pronounced. Guro-o, for now offers purchase of “airtime” through electronic payment platforms such as Paypal.

Convenience tests

Compared to either buying a recharge card from a vendor or through an e-wallet such as EcoCash, logging onto a website, punching payment instructions offers vastly superior convenience and productivity for those in Zimbabwe. With low internet speeds in Zimbabwe that electronic payment system may provide more inconvenience.

There is a hidden cost to Guro-o usage its marketers are mum about, understandably so, the host network’s data bundles being an integral part of the cost of using the VoIP app. Thus the true cost of using Guro-o exceeds the advertised rates.

Owing to the relatively low and unstable local internet speeds, Guro-o users, just like any other app-based voice services, are likely to experience frequent call interruptions or dropped calls. This is a very critical consideration when making a decision to use Guro-o.

Potential users will ask: Is the six US cents or 12 US cents per minute enough a compensation for lost productivity and inconvenience?

In terms of maintenance, there is no need for a SIM replacement and thus Guro-o, in this regard will save valuable customer time. But again, how many times on average does a person lose or experience SIM card problems?

When it comes to supplements, SIM cards can offer what Guro-o cannot at the moment — mobile banking and money transfer being two cases in point. One would still need a SIM card in addition to Guro-o in order to access mobile banking services.

The question is: Is it convenient to have Guro-o and a SIM card? What could perhaps give Guro-o a zing is offering, as a supplement, low-cost SMS subscription service similar to WhatsApp.

As a country, we are not yet at the always-on internet broadband evolution stage. Resultantly, it is very likely that there will always be a substantial number of Guro-o users “off-line”, a point that gives GSM operators a big competitive edge.

With WhatsApp, Viber and Skype already offering lower charges than Guro-o, Africom has more work to do. Only then can it cause NetOne, Telecel and Econet sleepless nights.

Reflect on it

WhatsApp is now a household name even in our rural areas. A combo of value propositions across as many points as possible in the customer experience cycle wedded to affordability can replicate WhatsApp’s disruptiveness in Zimbabwe.

Chulu is a strategic HR consultant who is pioneering innovative strategic HR practices in listed and unlisted companies in Zimbabwe — brettchulu@consultant.com

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