Analysts count on porting for cellphone shake-up
The ability to switch networks and retain your number will become just one of several factors to consider when customers decide whether to renew a contract with their existing network or to defect to a rival operator.
“It will shake up the industry in as far as services and offerings go. They will be more aware of retaining customers and we will get better services and customer care,” analyst Steven Ambrose said this week.
“As the networks take their customers’ needs more seriously, it will definitely improve the overall service and add to the driving down of prices.”
The initial response to porting has been dire, with only 23000 customers using the multimillion-rand service since its launch on November 10, according to figures from Cell C. But now the service is active there should be a steady and constant take-up.
Because most people who are likely to switch are on a two-year contract, only one customer in every 24 will be considering porting at any given time. It will take two years before all contract customers have faced the decision of renewing their contract or switching network.
At the moment the process was still a pain, said Ambrose.
At first only 50% of users who tried to change networks saw the process completed successfully within a day. That had now risen to at least 80%.
“There’s no doubt it’s been a long, arduous and very difficult process for most people. From a customer perspective it’s definitely not a failure, but it is a schlep,” said Ambrose, a director of the research house World Wide Worx. “Given another six months the process will become fairly automatic and smooth.”
Ambrose believes large companies will drive the movement over time, as they group all their staff onto one network to eliminate costly interconnection fees.
In a survey World Wide Worx conducted before portability launched, about 26% of consumers said they would switch networks, mainly in a quest for cheaper calls.
Ambrose said that was a highly inflated figure compared with how many would actually move, particularly as the fees charged by the rival networks are so similar. “There is tremendous parity across the prices. They call it customer choice, but in many cases it’s customer confusion.”
If the operators were smarter they would treat portability as a way to improve their service instead of seeing it as a negative, Ambrose said. If the networks made sure porting was easy, customers could return to a previous network after a couple of months if they preferred.
Although portability gives users freedom to hop networks, it may have little effect in practice, believes Markinor director Heidi Brauer. “People like stability and it’s too much time and effort to switch,” she said.
Even a lower price would not necessarily make them move, because value for money and quality of service were more important than the actual cost.
“We sometimes think consumers are smarter than they are,” Brauer said. “Everybody whinges about price, but ask them what they are paying and they can never tell you.”
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