2010 telco innovation study

2010 Telco Innovation Study

South Africa

This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for

distribution outside the client organization without prior written approval from InnovationAgency. This material was

produced by InnovationAgency based on client interaction; it is not a complete record of the discussion.

About the Innovation Study

2010 Innovation Study Results

About the Innovation StudyPurpose of the Innovation Study

Research methodology

Respondent demographics

Innovation Study questionnaire

Purpose of the Innovation Study

In the highly competitive market that organisations in South Africa find themselves, ameans of differentiation is of paramount importance. Innovation is seen as one of theprimary drivers in achieving this differentiation.

This study investigates a number of aspects surrounding the level of innovation beingachieved by organisations, as perceived from a localised end-user perspective. Thestudy also looks at the level of customer satisfaction with their telecommunicationsprovider (Telco); and what would entice a customer to switch from one Telco toanother. The market research conducted highlights which Telcos are perceived to bethe most innovative in the industry. Further analysis delves into why this is so.

The study also serves to create a greater awareness around the concern that Telcosneed to be responsive to customers’ emotional needs. The core purpose underpinningthis initiative is a strategy for managing the information acquired and turning it intoinsights that empower customers in new ways.

Research methodology

This report provides insight on the study conducted during 2010. This is anadministered survey conducted during various programs and workshops offered byInnovationAgency.

The survey was administered in a controlled manner. Survey questions were designedto be opened-ended in nature, and served to gauge individual perceptions around thelevel of innovation achieved by institutions from an end-user perspective.Respondents were not given information and/ or definitions of the survey questions.

Data collected was grouped and analysed and keywords created as a means tographically represent the results of study. The 2010 Innovation Study consisted of456 respondees.

Innovation Study questionnaire

The study questionnaire consisted of the following questions:

•Which Telco is the most innovative?

•Why did you rate the Telco as the most innovative?

•What lessons can be learnt from innovative Telcos?

•Have you switched Telco in the last 12 – 18 months?

•Why did you switch Telcos?

•Why have you not switched Telcos?

Key thoughts

Respondent demographics

• Study respondents represented a widespread of individuals, from various backgrounds

Female41%

Male59%

Male vs. Female

Coloured13%

Indian22%

African28%

White 37%

Population group

0%

5%

10%

15%

20%

25%

30%

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+

Age Distribution

0%

5%

10%

15%

20%

25%

150k -250k

251k -350k

351k -450k

451k -550k

551k -650k

651k -750k

751k -800k

850k -1mil

1.1mil -

2.6mil

Income Distribution

2010 Innovation Study resultsMost innovative Telco

Reason for rating the Telco innovative

Lessons from innovative Telcos

Switched Telco in the last 12 – 18 months

Reason for switching Telco

Reason for not switching Telco

Key thoughtsMost innovative Telco

• The mobile players are seen to be the more innovative ahead of the fixed line players

• Vodacom is perceived to be the clear leader in innovation, and MTN is the distant second

0%

10%

20%

30%

40%

50%

60%

Econet Wireless

Zim

Telkom Virgin Mobile

Neotel None Cell C MTN Vodacom

Key thoughts

• The cost factor does not rank highly on the list, suggesting that customers are willing to pay for the products and service they want

• “Products” are at the top of the list for rating a Telco innovative, ahead of “customer service” and “technology”

Reason for rating the Telco innovative

0%

5%

10%

15%

20%

25%

30%

Key thoughts

• The prominence of customer centricity in the study implies that customers are looking for products and services to suit their specific needs

• The top lesson that respondents gave suggests that company brand positioning and how well they are known clearly influences customer perception

Lessons from innovative Telcos

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Key thoughts

• The introduction of number portability does not seem to have added to the number of customers switching Telco, suggesting that there may be more reasons for customers not switching

• The relatively low percentage of respondents who had switched may be seen an indication of the satisfaction levels experienced with their Telco providers

• Less than one sixth of the respondents had switched Telco, despite the introduction of number portability

Yes14%

No86%

Switched Telco in the last 12 – 18 months

Key thoughts

• Results indicate that there may be more than one reason that drives customers to switch

• Customers don’t seem to be deterred by cost implications for the service they want

• Service levels were a significant factor for most of the respondents in their decision making process

Reason for switching Telco

0%

5%

10%

15%

20%

25%

30%

35%

Key thoughts

• Despite the availability of number portability, customers indicate that they are finding switching too difficult

• Results also indicate that customers find it hard to differentiate the offerings from each Telco

• The results also suggest that customers chose to stay with one provider for more than one reason, but service levels were the most important

• 5% of the respondents indicated to have been unable to switch, presumably due to contractual obligations. These respondents also indicated that they intend on switching

Reason for not switching Telco

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

United Kingdom Israel

London81 Oxford StreetLondonW1D 2EUTel: +44 (0) 207 903 5410Fax: +44 (0) 207 903 533

5 Feierberg St.Kfar SabaIsraelTel/Fax: +972-77-551-2156Mobile: +972-52-677-4476Skype: ilan.amit

Australia

MelbourneLevel 50120 Collins StreetMelbourne, 3000Tel: +61 (0) 3 9225 5264Fax: +61 (0) 3 9225 5050E-mail: [email protected]

SydneyLevel 3450 Bridge StreetSydney, NSW 2000Tel: +61 (0) 2 8216 0909Fax: +61 (0) 2 8216 0701E-mail: [email protected]

South Africa

JohannesburgPeregrine Building6a Sandown Valley CrescentSandton, 2194Tel: +27 (0) 11 783 0009Fax: +27 (0) 880117063161E-mail: [email protected]

Cape Town3rd Floor, Triangle House22 Riebeek StreetCape Town 8001Main tel: +27 (0) 21 410 8700Main fax: +27 (0) 21 410 8711E-mail: [email protected]

We live in a socially aware society whereinvolvement across a collective workforcecommunity is used to drive innovation. SocialBased Innovation approaches pave the way toa more networked and integrated means ofmanaging innovation. We are driving thisevolution forward.

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