The South African mobile market “lags Europe by about a year in terms of trends,” says Shameel Joosub, newly appointed CEO of Vodacom. If you take into account that Joosub had been running Vodafone Spain – arguably the toughest of Vodafone’s operations around the world, given the Spanish economy – the experience is invaluable.
He likens the understanding of Europe to being able to use a time machine. But, he adds, Europe hasn’t always been ahead. He says he was able to implement some of his learnings from running the South African operation in Spain.
Joosub (41), has only been in the corner office for a few weeks at Vodacom, and already he is confident and seems at ease running the R150bn mobile giant.
“We have the best deals in the market,” he says matter-of-factly. Many would disagree, especially given Cell C’s aggressive pricing moves in recent months. The third-biggest operator, now under the leadership of the man who employed Joosub when he was running Vodacom – Alan Knott-Craig – has been signing up 700 000 new customers a month.
“Alan’s very smart,” says Joosub. “He gave me a lot of opportunities. But, he’s got his work cut out for him.”
“Vodacom will stay competitive, Vodacom is not going to rollover. It’s great to compete with Alan.
“Is it easy? Yes, why not?” chuckles Joosub, offering a rare glimpse into his wicked sense of humour.
Competition in the coming months is going to be ferocious. Vodacom finds its market share closer to 50% than perhaps it’s ever been. In the consumer space, according to a few well-placed sources in the industry, Vodacom is neck-and-neck with MTN. The Mobility 2012 study from World Wide Worx also suggests this.
The changes are coming thick and fast. Joosub says the first thing he did last month was to increase value across all contracts. The operator has also noticeably trimmed back the number of different contract offers in the market, and will continue to do so. Joosub talks of “simplicity and clarity”, where customers are given the choice when it comes to contracts.
He echoes the notion that South Africans love choosing their phone first, and then try to fit that into a contract. For clearer tariffs to become a reality, Joosub wants to make sure that Vodacom offers contract pricing with and without phones. Often a large portion of the monthly fee on a contract goes towards paying off the handset. “Our subsidy levels are extremely high,” says Joosub. “They tended to grow while I was away”.
Its smart price plans, which offer voice, SMS and data, are the first step towards the company’s strategy of offering “integrated tariffs, with data being the lead”.
Their success in the market is not surprising. Joosub confirms the smart price plans are the “primary product” Vodacom’s selling at the moment.
From today, Vodacom has also launched 89c per minute calls to 52 international destinations (with the one-off R5 activation charge). This is in clear response to Cell C’s 99c per minute rate for international calls, but Joosub says that it is no good matching what competitors offer, one needs to beat it.
Its Power Hour promotion, possibly often forgotten about, has seen 15m uptakes since launch a few months ago. Power Hour offers 60 minutes of on-network calls between 6am and 8pm, for only R8. Joosub points to the fact that this works out to an effective 13c per minute.
“We decided to move away from the [99c per minute] discussion, and take away the restriction from people,” he says.
In the data space, Joosub says its promotional pricing is “comparable around the world”. Its new 24-month deals offer 1GB for R89 per month, 2GB for R139, and 3GB for R189. Admittedly there is more work to be done in the one-off bundle and prepaid space, but he defends Vodacom’s use of promotions to change pricing, arguing they offer speed and more flexibility.
Joosub will also continue predecessor Pieter Uys’s aggressive push to increase the number of smartphones on the Vodacom network.