Telkom needs to touch tomorrow
Previous service levels had been so dismal that up was the only direction it could take.
One of the most important characteristics of top brands is the feel-good factor. Telkom, once a joke among consumers and businesses for its shoddy service, indifference and ineptitude, slowly improved its image to become one of South Africa’s top brands, despite being a real, and then effective, monopoly.
But the crown has slipped.
From being top telecommunications provider in the Top Brands Survey not so long ago, it slumped to number three in 2006 and this year finds itself at number four in the rankings behind Vodacom, MTN and Cell C. Only Virgin Mobile, which started local operations just last year, was behind off a zero base.
Some telecommunications analysts are cynical that Telkom was ever entertained as a top brand, given the lack of competition and its generally poor image among the South Africans compelled to use its services.
In the face of growing competition and deregulation in the telecommunications sector — and continual restructuring of the organisation itself — the writing was on the wall for Telkom: it had to up its game.
A new logo and corporate image were created and applied throughout the organisation, and operations were significantly improved. Previous service levels had been so dismal that up was the only direction it could take. These changes had a positive effect on Telkom’s image.
Now new technologies, provided by other organisations, are rapidly superseding Telkom’s fixed-line network, although some crumbling protectionism does ensure that it retains its stranglehold on, for example, the provision of Internet bandwidth.
Neotel, its first “official” national fixed-line network competition, has been licensed for some time now, but has yet to make a hugely visible splash in the business and consumer markets. Many people know Telkom’s payoff line is “Touch Tomorrow”, while few know Neotel’s, which is “The Journey Starts Here”.
However, successful cellular network operators, established and emerging wireless telecommunications technologies, and further industry deregulation are all ensuring that Telkom has its work cut out. The fact that the brand is becoming less pre-eminent is a reflection of the position it finds itself in when doing business. Contrast that with the branding success of Vodacom and you begin to get the picture.
The big question is: can Telkom turn it around?
Giles Shepherd, managing director of Brand Alive, says it is rare for brands to lose their popularity. He goes on to say that branding is about consistency.
“Nokia is the top cellular phone brand in the world, but its roots stretch back a century and are in rubber boots and cabling. Although its current business has nothing to do with where it began, and the company is always reinventing itself, its branding has remained consistent over time.
“Coca-Cola, the world’s top brand, is another example of brand consistency. It has grown its portfolio to include other drinks and its advertising has modernised. But the Coke brand is as instantly recognisable today as it was decades ago,” he says.
Shepherd says Telkom reached its position due to monopolistic practices and became a monolith which was difficult to control.
“With no competition, it could do what it liked. Executives knew that people didn’t like the organisation, however, and they have worked hard to make massive improvements in the face of growing competition. They knew they had to improve the organisation’s image.
“Branding was an important part of this exercise and the company’s new logo has now become instantly recognisable. Many Telkom customers have had good experiences recently and the brand was supported by improved service — not just advertising — speak volumes. Contrast the Telkom of today with that of 15 years ago and you can see the difference.”
However, says Shepherd, a brand cannot remain as it is and expect to remain relevant.
“It must be re-invented and refreshed to remain visible, recognisable and honest. An organisation’s internal and external needs have to be consistently re-evaluated and then reflected in its branding.”
That’s been a tough call for Telkom, given its background. When it was under the Department of Posts and Telecommunications under the National Party government branding was not an issue.
People applied for a telephone and got one when the post office got around to it. This was not likely to engender goodwill among customers and many people have said that as soon as there’s an alternative they’ll jump ship as a matter of principle. Others are more resigned and find change more disruptive than switching service providers.
Telkom SA was founded in October 1990. It remained a state- owned enterprise until 1997 when a 30% stake was sold to a strategic equity partner. This was when branding started to become more important for Telkom.
In the build-up to its IPO and subsequent listing on the JSE and NYSE in March 2003, sponsorships, advertising and marketing became paramount.
Since then the organisation’s branding has slipped significantly in the Top Brands rankings. Can it regain its crown in an increasing flurry of competitive activity?
Time will tell. Telkom wants its customers to Touch Tomorrow. For itself — brand-wise — that day has already come. The real question is: is it up to the task?
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