Home South African SA’s telecoms industry ranked at the bottom

SA’s telecoms industry ranked at the bottom

250

SA’s telecoms industry ranked at the bottom of the consumer sentiment for the second consecutive year, when compared to the banking, insurance and food retail industries.

SA’s telecoms industry ranked at the bottom of the consumer sentiment for the second consecutive year, when compared to the banking, insurance and food retail industries. File Image: IOL

SOUTH AFRICA’s telecoms industry ranked at the bottom of the consumer sentiment for the second consecutive year, when compared to the banking, insurance and food retail industries.

While the local telecoms sector worked towards augmenting its network capacity with additional fibre and wireless deployments in 2021, service operators still had a way to go in meeting consumer expectations, according to the latest South African Telecommunications Sentiment Index, conducted by DataEQ (formerly BrandsEye) in partnership with Deloitte Africa.

The index suggested that South Africans generally had poorer experiences with their network providers than with their banks, insurers and food retailers.

The trend was observed when looking at the Index’s operational conversation in which the telecoms industry’s average operational Net Sentiment sat at -62.4 percent while banking scored -33.1 percent and the insurance industry averaged -28.9 percent. The operational conversation pertained to mentions from consumers in a consumer journey with a provider from those looking to sign up or cancel as well as both current and former customer experience reflections.

To come up with the individual telco rankings, the Index tracked close to two million social media posts about Cell C, MTN, rain, Telkom and Vodacom throughout the year and saw minimal movement from the previous year’s rankings.

Most telcos saw an annual Net Sentiment improvement with MTN extending its lead by producing the largest year-on-year Net Sentiment improvement, while the uptick in Rain could not yield a ranking shift. The biggest improvement in both reputational and operational sentiment came from Telkom, which saw the partly state-owned telco lifting to share second place with Vodacom.

Cell C was the only provider, which bucked the trend as its Net Sentiment worsened last year causing the telco to slide down one spot in the ranking.

Deloitte Africa TMT industry leader Gill Hofmeyr said while conditions have been trying across most sectors in recent years, she noted telecoms operators have had a particularly tough run.

“Amid increasing data traffic, telcos have battled for additional broadband spectrum. Load shedding has also had a devastating impact on the industry, pushing operational costs up at a time when margins were already under immense pressure,” Hofmeyr said.

Load shedding compounded network stress across the industry as data provided by EskomSePush confirmed that load shedding was implemented on a total of 45 days last year.

According to the Index, over half of these days also saw unusual volumes of network complaints from telcos, thereby evidencing the negative impact of load shedding.

Pricing, network quality and customer service were the three major aspects network providers could offer value to customers.

According to the Index, the telcos’ reputational efforts masked poor customer service. Of the improved sentiment from 2020 to last year, DataEQ managing director Melanie Malherbe said much of the progress relied on telcos’ reputational efforts.

“Notwithstanding some successful brand and influencer campaigns, customer experience remained a major shortcoming across the industry, with consumer sentiment for this aspect worsening year on year,” Malherbe said.

The Index said that as network providers continued to delve deeper into the financial services space, this year’s index also included a dedicated analysis of telcos’ adherence to the Financial Sector Conduct Authority’s (FSCA) Treating Customers Fairly (TCF) regulatory framework with regards to their financial services offerings.

The poor response to customer conversation in this regard had, therefore, not only impacted a brand’s reputation, but could posed a market conduct risk as well.

Hofmeyr said beyond these rising regulatory pressures, the results indicated that telcos lagged the broader financial services sector in terms of consumer sentiment.

“It will be important for telcos to seek to close these gaps through improved customer service if they are to grow their financial services businesses,” Hofmeyr said.

Last month, the Independent Communications Authority of South Africa confirmed the successful conclusion of the much-anticipated high-demand radio frequency spectrum auction. The auction involved six qualified bidders, that are Cell C, Liquid Intelligent Technologies, MTN, Rain Networks, Telkom and Vodacom.

BUSINESS REPORT

Previous articleEFF wins by-election in Phokwane
Next article‘Mad Men’ actor Robert Morse dies at 90