2012 telco innovation study
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2012 Telco Innovation Study South Africa This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Innovation Agency. This material was produced by Innovation Agency based on client interaction; it is not a complete record of the discussion.
In the highly competitive market that organisations in South Africa find themselves, a means of differentiation is of paramount importance. Innovation is seen as one of the primary drivers in achieving this differentiation. This study investigates a number of aspects surrounding the level of innovation being achieved by organisations, as perceived from a localised end-user perspective. The study also looks at the level of customer satisfaction with their telecommunications provider (Telco); and what would entice a customer to switch from one Telco to another. The market research conducted highlights which Telcos are perceived to be the most innovative in the industry. Further analysis delves into why this is so. The study also serves to create a greater awareness around the concern that Telcos need to be responsive to customers’ emotional needs. The core purpose underpinning this initiative is a strategy for managing the information acquired and turning it into insights that empower customers in new ways.
This report provides insight on the study conducted during 2011 and 2012. This is an administered survey conducted during various programs and workshops offered by InnovationAgency. The survey was administered in a controlled manner. Survey questions were designed to be opened-ended in nature, and served to gauge individual perceptions around the level of innovation achieved by institutions from an end-user perspective. Respondents were not given information and/ or definitions of the survey questions. Data collected was grouped and analysed and keywords created as a means to graphically represent the results of study. The 2012 Innovation Study consisted of 388 respondees.
Innovation study questionnaire ���Which Telco is the most innovative? Why did you rate the Telco as the most innovative? What lessons can be learnt from innovative Telcos? Have you switched Telco in the last 12 – 18 months? Why did you switch Telcos? Why have you not switched Telcos?
§ Respondent demographics
Female 42% Male
58%
Gender split 0%
5%
10%
15%
20%
25%
30%
35%
20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59
Age distribution
0%
5%
10%
15%
20%
25% Income distribution
Asian 19%
Black 20%
Coloured 11%
White 50%
Population group
2012 Banking Innovation Study Results��� Most innovative Telco Reason for rating the Telco innovative Lessons from innovative Telcos Switched Telco in the last 12 – 18 months Reason for switching Telco Reason for not switching Telco
§ Most innovative telco
8ta entered the market with an aggressive pricing strategy to rival the bigger players, but has yet to gain significant market share.
Newcomers into the space will probably find it difficult gaining market share, in a market dominated by the Vodacom, MTN and Cell C.
Vodacom is perceived to be the clear leader in innovation followed by MTN and Cell C.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
8ta Redbull mobile iBurst Telkom Virgin Mobile Neotel Cell C MTN Vodacom
§ Reason for rating a telco innovative
Telco’s continue to widen their distribution network to also offer products outside of their core Telco offering such as store vouchers and furniture, together with the cellphone package
Mobile operators have been increasing their capex in technology and infrastructure to meet growing demand in mobile internet usage, which saw growth to 44%, from 27% in 2010 (WorldWideWorx, 2011 Cellphone Usage Report). “Products” are at the top of the list for rating a Telco innovative, ahead of “Customer service” and “Technology”.
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Reliable/ stable
Challenge the status quo
Partnership established
Perception
Offer more
Innovative
Targeted market
Tariffs/ charges
Flexible/ adapt to changes
Leaders
Mobile service
Time to market
Network
Technology
Growth of business
Customer service
Marketing
Products/ packages
§ Lessons from innovative telco
The prominence of customer centricity in the study implies that customers are looking for products and services to suit their specific needs. Customers are also signaling for more innovations from their Telco’s. This may be signal ing greater di f ferentiat ion by customers, from their Telco’s.
The top lesson that respondents gave suggests that company brand positioning and how well they are known clearly influences customer perception.
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Company strategy
Competitiveness
Consistency
Continuous improvement
Look for opportunities
Price strategy
Target market
Keeping it simple
Products
Challenge the status quo
Flexibilility/ adapt to changes
Technology improvement
Lead
Risk management
Growing the business
Encourage innovation
Customer service
Customer centricity
Marketing
§ Switched telco in the last 12–18 months
The introduction of number portability does not seem to have added to the number of customers switching Telco, suggesting that there may be more reasons for customers not switching.
Less than one eighth of the respondents had switched Telco, despite the introduction of number portability.
No 88%
Yes 12%
§ Reason for switching telco
Results indicate that there may be more than one reason that drives customers to switch.
The increase in price competition together with the decision by the communications regulator to force Telco's to lower their interconnect fees has resulted in greater choice for the customer not just in terms of products but prices too.
“Products” was the top reason for rating a Telco innovative, however “Customer service” was the top reason given for switching Telco's.
0% 5% 10% 15% 20% 25% 30% 35%
Convenient
Made errors
Needed the change
Network
Products/ packages
Appealing
Wanted to try something new
Contract ended
Technology
Cost issue
Better offer
Company controlled
Customer service
§ Reason for not switching telco
Results also indicate that customers may find it hard to differentiate the offerings from the different Telco’s.
The results of this question may be used as a gauge of customer satisfaction levels with their Telco's. The results also suggest that customers choose to stay with one provider for more than one reason, but service levels were the most important.
0% 5% 10% 15% 20% 25% 30% 35%
Lazy to switch
Loyal
Marketing
Network
Cost issue
Products/ packages
Convenient
With multiple Telcos
Too combersome
Locked in contract
No reason to
Company controlled
All the same
Customer service
Satisfied with Telco
Trends 2007 - 2012��� Most innovative Telco Reason for rating a bank innovative Switched Telco in the last 12 – 18 months Reason for switching Telco Reason for not switching Telco
§ Most innovative telco
Vodacom has seen the biggest drop from 2012 levels, whilst Cell C has risen since 2010 levels.
Telkom has not been recognised for innovation despite being the oldest provider within the group. Vodacom continues to hold the lead position in this category, despite dropping from 2010 levels.
Shifts in position were more apparent among the top 3 mobile operators – Vodacom, MTN and Cell C – with the rest of the group relatively stable in the 3 years.
0%
10%
20%
30%
40%
50%
60%
2010 2011 2012
Vodacom
MTN
Cell C
Neotel
Virgin Mobile
Telkom
iBurst
8ta
Redbull mobile
§ Reason for rating a telco innovative
“Products” as a reason for rating a Telco innovative has remained at the top position may be indicative of how innovation is viewed as a tangible commodity. “Customer service” looks to be steadily gaining ground, despite being a distant 3rd in this category.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2010 2011 2012
Products/ packages
Marketing
Customer service
Growth of business
Network
Technology
§ Switched telco’s in the last 18months
Number portability does not seem to have had a huge impact in customers switching Telco’s.
The number of respondents who had switched Telco’s remains relatively small from 2010 levels.
14%
86%
9%
91%
12%
88% Yes
No
§ Reason for switching telco’s
“Products/ packages” was the number one reason for rating a Telco innovative and “Customer service”, however, was the number one reason given for switching Telco’s.
Respondees switching Telco’s as a result of their employers has had a sharp increase during the 2011 to 2012 period.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2010 2011 2012
Customer service
Company controlled
Cost issue
Technology
Network
Products/ packages
§ Reason for not switching telco’s
“Products/ packages” was absent as a reason for not switching Telco’s, despite being the top reason for rating a Telco innovative. More and more customers indicated to being “Satisfied” with their respoective Telco’s.
0%
5%
10%
15%
20%
25%
30%
35%
40%
2010 2011 2012
Satisfied with Telco
Customer service
All the same
Company controlled
Locked in contract
Too cumbersome
Loyal
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South Africa, Johannesburg��� Peregrine Building 6a Sandown Valley Crescent Sandton, 2194 27 11 783 0009 E-mail: sl@systemiclogic.net
United Kingdom, London ��� 81 Oxford Street���London ������ 44 207 903 5410 E-mail: sl@systemiclogic.net
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