Why be first?
The question lining the corridor is why they are so interested in winning the rollout race when Internet related data income is such a low percentage of their total revenue.
A closer look at this phenomenon however reveals that the one giant has no real choice but to keep up with other, unless it wants to lose market share to its competitor.
The irony here is that the market share we are referring to is not limited to the Internet access market but includes full mobile packages.
Early adopters are generally high telecoms spenders, and they will most likely support a company which is first regarding rollout of the latest technologies.
MTN has earned a reputation of being sluggish with early adopters when they launched their 3G offering a full six months after Vodacom, and they have most likely learned a valuable lesson with this decision.
If MTN did not roll out HSDPA in line with Vodacom’s release, they would have had to contend with many of their consumers taking out Vodacom contracts to use this new high speed data service.
With their recent announcement that HSDPA will soon be available in the major cities in South Africa MTN ensured that their high-end users will rather wait for MTN’s offering than migrate to Vodacom. Much more convenient that migrating to a competitor if the wait is not too long.
If the release was however six months away a migration would have been an attractive option.
Pieter Uys, Vodacom COO, recently pointed out that it is not all about higher speed Internet access, but also about adding value to existing customers.
Value adding services and technologies are an important component in retaining customers and it is great to see that our cellular giants are willing to push to ensure that local users are in line with their international counterparts.
The use of the latest technologies can further improve quality of service. Fewer dropped calls, more stable and faster data connection.
The value of being known as a cutting edge company is also very valuable, not only to customers, but also to employees. Everybody loves a winner, and the local cellular space is no exception.
But with all these business and operations related arguments one runs the risk of underestimating the ‘cool factor’. With technology there is always a race to be first, and if you have look at your friend’s new gear simply because he supports a different operator you may just consider switching providers when your contract expires.
Their prices are, after all, basically the same.
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