It is no secret that since the return of Cell C into the mobile service provider competition, things have become tough for the main competitors – MTN and Vodacom. Who will win this battle though?
Cell C has been a competitor in the South African market for cellular providers since 2001, but since then Cell C went through it’s fair share of bumps on the way. It wasn’t until 2011, when Cell C launched its greatest marketing campaign ever, featuring South African comedian Trevor Noah, that Cell C became a huge threat to the well-established Vodacom and MTN. Most of you will remember the very memorable “I’m watching you – Like a hawk” adverts.
But making Trevor Noah their “Chief Experience Officer” or “CEO”, wasn’t the last trick Cell C had up their sleeve. It was game-on and competitor’s had 2 options, react and show that they’re intimidated or sit back and see what Cell C will do next. At first sight, it appears like they opted for the latter. Cell C claimed to have a plan to revolutionize South Africa’s 4G data networks. A lot of pro’s immediately jumped to the conclusion that Cell C will be introducing a much faster, but more expensive network. Cell C surprised us with the opposite. They gave consumers a faster, but surprisingly cheaper experience. At 15 cents per Megabyte, Out-Of-Bundle, Cell C’s new data rate was up to R1.75 cheaper, per MB, than it’s competitors.
Very quickly Cell C made its grande return to South Africa and soon more shops, TV ads and marketing campains came onto the scene. Cell C didn’t have the only attention though, with telecom giant Telkom spawning a new mobile department called 8ta, later becoming better known as Telkom Mobile. Telkom Mobile at this time had no memorable introduction into the mobile services market, but nevertheless it did did confuse consumers a bit. For quite a while consumers were also scared about the trustworthiness of Cell C’s mobile network and questions were asked about why exactly Cell C’s data cost could be so low, at what expense was it?
To date we have seen no real setbacks or reasons that could explain how Cell C can still keep costs for not only their data, but all services, so low. I recently set up a model to simulate the costs of day to day use between the 3 networks. In some scenarios Cell C came up to 65% cheaper to use. Not only does Cell C offer cheap services, but during the past 2 years Cell C has also introduced some freebies and promotions that really made huge differences to the look consumers has of Cell C.
In October 2014, Cell C played its second big card, introducing free WhatsApp. This move could save some users up to R100 every month. Although this promotion was only set to run for a short period of time, Cell C soon adopted it for a specific group of its contract and prepaid clients on the long-term. This promotion received a lot of positive feedback on social media and a lot of consumers opted to move their data services to Cell C because of it.
During this time Cell C faced another challenge that its competitors faced a long time ago already – Consumer Service challenges. Cell C received a large amount of queries regarding the WhatsApp promotion and a large increase in porting requests and for a couple of days experienced an issue where they could not attend to all of their customer queries. Cell C acted fast though and soon they fixed the problem and queries were attended to faster than ever. Cell C also increased the amount of employees they have in their shops and call centres to improve their customer service, making them one of the leading companies in customer service according to HelloPeter statistics.
The above is misleading though, as it only means that Cell C responds to customer service requests and not nessacarily satisfies customers through it. We could see this in the customer satisfaction data, kindly provided by HelloPeter.co.za (http://hellopeter.com/cell-c/customer-feedback-and-analysis on 05/07/2015)
It is important to note a couple of things in these statistics:
1. 50% of Cell C’s customers on HelloPeter was “Utterly Disgusted” with the response they received from Cell C regarding their service queries and complaints. This is extremely high and should be a great concern for Cell C. This could also set-back the customer increase they want, even with their running promotions and special services. It is, however, important to note that Vodacom and MTN had these statistics at 51% and 67% respectively. In this regard we can assume that in a perfect scenario, Cell C would have better service turnaround afterall.
2. During the past 60 days, Cell C is number one on HelloPeter’s “Service Turn-Around list”, which is very positive in light of Cell C’s customer service
The situation Cell C found themself in might have been slightly worrying, but it showed one thing- Their promotions and special services were working, so it was time for more.
A month ago Cell C made 2 other moves that is currently shaking up the industry – Contact Buy-Out and free Facebook. That’s right, not only is Cell C offering free Facebook to all its users from July 1st, it is also offering consumers up to R10 000 to buy them out of their current contract with competing companies. This move appeared to have hit competitors quite bad with Vodacom seeing a drop of R27 (17%) in its share price between April 28 and June 9, just after Cell C presented the Contract Buy-Out. During the same period, MTN shares dropped from R246 to R211 (-R35 / -14%). Coincidence? Probably not.
In my independent opinion, I believe Cell C has some good things going for them at the moment and I am very interested to see where they will be going from here. I’m writing this article for YOU though, so I’d love to hear your opinion. Are you a Cell C or competing customer?
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