Battle for cellphone users
First off the starting blocks – Cell C and Virgin Mobile – have already launched new ad campaigns. Market leader Vodacom plans to defend its turf aggressively but wasn’t willing to give details. MTN is launching a print campaign positioning it as "the only network of choice".
MNP came into effect on November 10, giving cellphone users the opportunity to switch to another network but to retain their numbers. The hassle connected with telling people that your number has changed has been a major obstacle to switching.
The smaller networks stand to gain the most. World Wide Worx’s Arthur Goldstuck estimates that 500 000 to 700 000 cellphone contract users may switch networks in the first year of number portability, which could result in more than R1bn worth of annual calls changing hands.
High call costs
The numbers come from a survey by World Wide Worx, which found that 27% of users once made aware of MNP said they’d switch networks. "In reality," says Goldstuck, "we expect less than half of those to carry out their stated intention – but that’s still a big percentage". By far the biggest reason given was the high cost of calls.
However, Vodacom CEO Alan Knott-Craig believes only 5% to 10% more subscribers (250 000 to 500 000) may switch. He points out that churn (switching) levels are already high.
Knott-Craig argues that number portability should be seen as a facility for customers who have good reasons for doing it. "If it’s used as a marketing weapon that’s not what it was designed for, but we’ll respond very aggressively. We’ll protect and increase our subscriber base. We’ll be in there, boots and all."
The switches won’t all happen at once, as they have to wait for existing contracts to expire. "The main impact on the customer is that MNP will give him more muscle to obtain a better deal," says Goldstuck.
Better deals
"At the moment new customers get better deals than renewing customers. So there’s already an incentive to move. Now the networks will have to sharpen up their offers."
Most of the switching will come from SA’s 5m contract subscribers. If the predicted numbers move – and their average monthly cellphone bill is a conservative R150 – that amounts to R900m to R1.26bn/year. And it could be more.
Finweek
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