SA consumers no longer like the telecom industry: The Citizen
South African consumers do not like the telecommunications sector more than they feel about the banking, insurance and food retail sectors, despite the industry’s work to increase their network capacity with additional fiber and wireless deployments last year.
It appears that service providers still have a long way to go to meet consumer expectations, according to the latest South African Telecommunications Sentiment Index, conducted by DataEQ in partnership with Deloitte Africa. The sector ranked bottom in terms of consumer sentiment for the second consecutive year.
Net sentiment for retail was 4.1%, for insurance 1.4%, for banks -7.5% and a whopping -31.1% for telecoms.
The shedding of the load contributes to the dislike for the telecommunications industry
Of course, it hasn’t been an easy year for the industry. “In the midst of increasing data traffic, the industry fought for more broadband spectrum, while load shedding also had a devastating impact, increasing operating costs when margins were already under enormous pressure.” says Gill Hofmeyr, leader of Deloitte’s Africa TMT sector.
Load shedding has increased network stress across the industry, and data from EskomSePush confirms that load shedding was implemented for a total of 45 days in 2021. More than half of these days were experiencing unusual volumes of complaints on the network.
MTN is the highest
Nearly two million social media posts were monitored throughout the year to determine how customers are feeling on Cell C, MTN, Rain, Telkom, and Vodacom. The index recorded minimal movement in the rankings compared to the previous year.
While public Net Sentiment for most providers except Cell C followed an upward trend over the course of the year, MTN and Telkom made the most consistent progress, with rains following a similar upward path. from February to October. However, Net Sentiment declined over the holiday period similar to MTN and Vodacom.
Only the intermediate positions changed when ranking network providers based on the public Net Sentiment score for 2021:
- MTN extended its lead with the largest year-over-year Net Sentiment improvement of 14.9 percentage points
- Telkom showed the biggest improvement in reputational and operational sentiment of 13.6 percentage points to share second place with Vodacom which saw a 2.8 percentage point increase
- Cell C was the only service provider whose Net Sentiment worsened in 2021 to 10.3 percentage points, causing it to lose a spot in the rankings
- the increase in rainfall of 2.6 percentage points was not enough to see a change in the rankings.
MTN also had an increase in Reputational Net Sentiment, which was linked to an increase in positive campaign conversations compared to 2020. Influencers were the key to MTN’s campaign success, with 41.7% of its positive reputation conversation. written or engaged with influencers who explicitly noted that they were hired for promotion.
Telkom recorded the largest year-over-year improvement in Reputational Net Sentiment thanks to a decrease in reputational negativity and an increase in positive reputational sentiment. This is good news as it suffered reputational backlash in 2020 for its decision to downsize 3,000 employees, while its network reliability was also questioned and made negative comparisons with Eskom.
Cell C’s operational Net Sentiment deteriorated the most, with five major peaks in operational complaints throughout the year, all related to network downtime.
MTN and Rain also experienced greater negativity around their networks, with network quality complaints doubling their contribution to both operators’ negative operational conversation. Vodacom has also had multiple reports of operational complaints, largely related to the competitor’s ShakeOff puzzles, with users claiming they were impossible to complete, as well as reports of network downtime.
Prices of the telecommunications sector
Cell C, MTN, and Vodacom all reduced the price of their 1GB, 30-day data package to R85 during 2021, while Telkom reduced its equivalent offering to R79. On average, 9.2% of industry operational complaints related to pricing, while one in five mentions of positive operational feedback was related to pricing.
The industry’s main driver for pricing operational complaints has been affordability, particularly for data. Despite improving price sentiment, Vodacom had a relatively high rate of affordability complaints.
In line with previous index results, the negative data pricing conversation has often occurred in conjunction with complaints on the network, suggesting that the provider’s data prices have raised expectations from the customer network.
Rain’s high rate of fee or charge complaints often came from customers struggling with network issues, who noticed it was unfair to pay for a service they didn’t get. Users also complained that they were billed more than they signed up for after the cancellation, suggesting that Rain’s pricing structure and cancellation policies were unclear to some.
Telkom’s customized Mo’Nice data offerings continued to generate above-average negativity, with some users reporting that they were unable to use their Mo’Nice data purchases. However, most of the complaints concerned the price of the offers. It appeared that users initially received affordable offers, with prices increasing in line with use.
Nic Ray, CEO of DataEQ, says much of the progress has been based on the reputational efforts of the telecom industry.
“Despite some successful brand and influencer campaigns, customer experience remained a major shortcoming across the industry, with consumer sentiment for this aspect deteriorating year after year.”
Considering their efforts in 2021 haven’t translated into a better customer experience than in 2020, this remains a key area for differentiation, he says.
This time around the Index also included a dedicated analysis of their adherence to the Financial Sector Conduct Authority (FSCA) Treating Customers Fairly (TCF) regulatory framework regarding their financial service offerings, as network providers continue to offer services. financial.
Hofmeyr points out that a poor response to the conversation with customers in this regard, therefore, not only impacts the reputation of the brand, but could also pose a risk of market conduct.
“In addition to these mounting regulatory pressures, the results indicate that telecom companies have lagged behind the broader financial services industry in terms of consumer sentiment.”