global mobile consumer survey 2018 the south african cut · 2020-05-13 · global mobile consumer...

Global Mobile Consumer Survey 2018The South African Cut

Global Mobile Consumer Survey 2018 | The South African Cut

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The mobile phone remains the primary means of communication for South Africans and more than half of the population uses their smartphones to access the internet. This ongoing smartphone revolution, which is seeing the availability of more affordable handsets/devices, means that more consumers can have access to powerful applications (Apps) on their fingertips. The way we learn, work and play is experiencing a significant transformation and at the centre of it all, is “data”.

Mobile operators have done a lot of work to extend their LTE coverage across the country. They are re-farming some of their existing spectrum and deploying techniques such as carrier aggregation to create additional capacity to carry data, faster. Urban consumers are the key beneficiaries of these initiatives and their rural counterparts are still concerned about having good coverage. Consumers’ demands for data prices to fall have triggered responses from service providers. However, mobile operators still argue they can do more if given additional spectrum.

The question around “where does expired data go” has also generated interesting discussions, which saw the regulator intervene to enable the rollover of data and more transparency on usage depletion. The aggressive rollout of Fibre to the Home has given increased choice to certain consumer market segments.

These developments have put the spotlight back on the consumer and in this GMCS SA Cut, we continue to explore key themes that provide useful insights of consumer behaviour and opportunities for market players. The availability of 4G/LTE is important for consumers in a data-driven world and consumers choose their service provider based on recommendations by family/friends.

This means that operators who improve their net promoter score will be well positioned to manage churn. Pricing is also important and younger people prefer uncapped deals. Is this the fear of missing out? Streaming and digital payments are gaining traction, even as privacy remains a big area of concern for consumers. It remains to be seen how much comfort the Protection of Personal Information (POPI) Act will provide.

Foreword

Looking aheadLooking ahead, there are interesting developments that we can expect to reshape the landscape of a mobile consumer. Firstly, some operators have indicated that they are looking to introduce e-sims within the 2020 timeline. This can potentially provide consumers a more flexible way of switching between network service providers. The few devices that currently support this technology may not be affordable for most consumers (initially) and hence the impact of this technology will most likely only be felt gradually.

Secondly, mobile operators have been saying that they need more spectrum to reduce data prices further. The recent policy direction by the communications ministry is important, but the industry still needs to wait for the implementation. This means that mobile consumers also have to wait longer to see if service providers will make good on their words.

Thirdly, 5G represents an opportunity for both operators and consumers. It is important that 5G awareness be driven by the services it brings, rather than the technical aspects behind it.

Grant ChivandireAfrica TMT Senior ManagerDeloitte Africa


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About the Report

This report focuses on how consumers are using their mobile devices in South Africa. It examines consumer consumption trends, usage and purchasing behaviour and patterns. The survey, now in its third year, involves 1 000 respondents across age groups, genders and socio-economic clusters.

Sample size: 1 000 respondentsDate of data collection: May 2018 – June 2018 Place of data collection: South Africa Data collected by: Ipsos MORI

As respondents often could select all options that apply, responses generally do not add up to 100%.

Male 50%

Female 50%

Gender Age group

Employment status

Monthly household

income

Location Type of mobile device

Type of contract

16 – 24 years 41%

25 – 34 years 37%

35 – 45 years 22%

Unemployed

11%

Employed

63%

Student

23%

Other

3%

Less than R7 000 (lower income)

25%

R7 000 – R20 000 (middle income)

25%

R20 000 or more (upper income)

24%

Prefer not to say/ don’t know

24%

Urban

79%

Rural

21%

Feature or basic phone

21%

Smartphone

63%

Tablet

30%

Monthly contract/post-pay excluding

phone

8%

Monthly contract/post-pay including

phone

37%

Pay-as-you-go/pre-paid

41%

Don’t know/other

14%


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Contents Choosing a network: Recommendation, internet plan and price

page 8 Choosing a device: Smartphones, sales channel and price

page 18

Device usage: Instant messaging, streaming, digital payments and fingerprint recognition

page 24Emerging trends: Data security and 5G

page 36Contacts & Contributors

page 42

Global Mobile Consumer Survey 2018 | The South African Cut | Choosing a network

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Choosing a network: Recommendation, internet plan & price


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Recommendations from family or friends and 4G/LTE network availability are top influencers

Overall, recommendations from family or friends and the availability of 4G/LTE are the two most influential factors when choosing a network provider. These deciding factors are independent of age and gender. In this regard, operators who improve their Net Promoter Scores (NPS) are likely to benefit. Although mobile operators have invested heavily in 4G/LTE network rollouts, consumers in rural areas tend to be more concerned about availability of fast connectivity compared to their urban counterparts. In contrast, urban users, who tend to have better access to 4G/LTE services, are more concerned about the quality of these services. Network sharing models can play an important role in reducing the cost of extending 4G/LTE network availability in rural areas.

Figure 1. Top reasons for choosing current operator (by location)Why did you choose your current mobile operator?

Source: Global Mobile Consumer Study, 2018

0 5 10 15 20 25 30

24%24%

22%24%

15%

15%

22%

19%

14%18%

16%

RuralUrbanTotal

Family/friends use the operator

4G/LTE network availability

Reliability, coverage and speedsof network for internet

Reliability and coverage of networkfor voice calls and SMS

Quality of customer service

27%

24%

29%

24%

15%

15%

20%

18%

14%

17%

17%

16%The price/offer for internet Plane(e.g. daily pass with unlimited internet)


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Figure 3. Customers’ overall happiness with operatorHow likely would you be to recommend mobile operator to a friend, colleague or relative?

Definitely not recommend

Definitely would recommend

I am neutral

0

5

10

15

20

25

30

35

3%2% 1%

3% 2%

34%

8%

13%11%

5%

20%

0 = 1 2 3 4 5 = 6 7 8 9 10 =

If the price and internet packages are not right, consumers are likely to switch their mobile operator

Lower data costs remain a primary appeal to price-conscious consumers, as most South Africans would change their mobile operator for a more competitive data plan. Consumers aged 16-24 years are less likely to change their mobile operator based on price compared to their older (35-45 years) counterparts. Network reliability, coverage and speed are almost equally important for older consumers. Over a third of consumers are either neutral or will not recommend their current mobile operator. More than half of all consumers would recommend their current operator.

Figure 2. Top reasons why customers may churn (by age)If you were to change your operator in the future, which would be the reasons for changing it?


The price/offer for voice and sms plan

Quality of customer service

4G/LTE network availability

Reliability, coverage and speeds of network for internet

The price/offer for internet plane (e.g. daily pass with unlimited internet)

0

5

10

15

20

25

30

35

16%

19% 20%18%

24%

20%

25%

30%

25%

31%

27%

24% 24%

20%

31%

16-24 25-34 35-45


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Consumers are generally satisfied with the speed of their network, but would access the internet more frequently if it was cheaper

In last year’s survey, a sizable share of consumers (39%) said they would access the internet more frequently if data was cheaper. However, this year this figure has declined to 29%, as the majority of consumers reckon that their current mobile data plan allows them to access as much internet as they like. Although consumers are generally satisfied with the speed of their network, consumers aged 35-45 years voiced high levels of dissatisfaction with the speed of the network but are unlikely to pay more to get higher speed. In contrast to this age group, dissatisfied younger consumers tend to be more prepared to pay a premium for higher speed.

0 10 20 30 40 50

41%My mobile internet package allows me to access the internet as much as I like

I would access the internet more frequently if it was cheaper

I would access the internet more frequently if I could better understand

how much data each app uses

I don’t know

I don’t have access to the internet as much as I like as I am worried

about going over my allowance

Other

29%

11%

10%

6%

4%

Figure 4. Internet subscription and usageHow do you feel about your current mobile internet subscription/tariff?


Figure 5. Internet speedHow do you feel about the mobile internet speed you currently get from your operator?

I am satisfied with the internet speed I currently get

OtherI am not satisfied with the internet I currently get, but would pay more to get greater speed

0

10

20

30

40

50

60

70

80

64%

16%13%

6%1%

I am not satisfied with the internet speed I currently get, but would not pay more to get greater speed

I don’t know


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17

Young consumers like their data uncapped

Uncapped data plans were most popular among young consumers (16-24 years), whereas data packages between 500MB and 5GB are the most popular packages among older consumers. This is in line with the observation that this age group is more likely than other age groups to access data-heavy applications or services such as streaming services. Although most respondents are using a pay-as-you-go or a pre-pay package, consumers between 25-34 years are the largest user group of this type of package, reflecting potential preference for more flexibility and their attitude towards being locked into contracts.

Figure 6. Mobile data plans (by age)What is your monthly mobile data allowance?

Figure 7. Preferred packages (by age)For your main mobile phone and main SIM what subscription/package are you on?


250MB-499MB 500MB-5GB 5GB-10GB 10GB-20G B0

5

10

15

20

25

30

35

40

7% 8%

35%

30%

39%

9%10%

7%8%

11%

6% 5%

16-24 25-34 35-45Total

More than 20G B

Unlimited

6%8%

38%

10%

4%7%7% 7% 8%8%

11%

16%

0

10

20

30

40

50

41%

37%35%

32%

46%

13%11%

6%4%

16-24 25-34 35-45Total

6%8%

39%

9%

4%

43%

7%5%

8%

3%

43%

A Pay-as-you-go/Pre-pay packageA monthly contract/post-pay which includes the phoneA monthly contract/post-pay which doesn’t include the phone (SIM only contract)Don’t knowOther

Global Mobile Consumer Survey 2018 | The South African Cut | Choosing a device

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Choosing a device: Smartphones, sales channel and price


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21

Brick-and-mortar outlets remain primary sales routes for the purchase of mobile phones

Brick-and-mortar outlets remain the most popular sales outlets for South Africans to purchase mobile devices. For in-store purchases, compared to the previous year (58%), the popularity of mobile operator outlets has decreased considerably (46%). The choice of retail channel, however, differs depending on where the consumer lives. Consumers in rural areas are more likely to purchase their devices from a general retail store compared to those in urban areas. Urban consumers tend to purchase directly from the mobile operator, whether in-store or online. Compared to the previous year, e-commerce website purchases have risen significantly to 24% (from 16%), indicating a rising popularity and competitiveness of this retail channel. The usage of instant messaging and social media apps, as well as the availability of a wide pricing range has driven mass smartphone adoption.

Figure 8. Device ownership and accessWhich of the following devices do you own or have ready access to (at work or home?

Figure 9a. Mobile phone purchase channel (in-store)Through what physical channel did you purchase your phone?

Figure 9b: Mobile phone purchase channel (online)Through what online channel did you purchase your phone?

0 20 40 60 80 100

94%

56%

12%

10%

9%

8%

45%

35%

Smartphone

Laptop

Tablet

Desktop computer

Smart watch

Feature or basic phone

Virtual reality (VR) headset

Fitness band

0 10 20 30 40 50 60

46%

24%

8%11%

6%

2%

13%

11%

From a mobile operator

From a retail store

From a manufacturer shop

From an electronic retailer

From a second-hand eletronic shop/phone

refurbishing

58%

9%

6%

From a mobile phone shop

2017 2018

0 5 10 15 20 25 30 35

24%

15%

3%

3%

From a mobile operator

From an online-only e-commerce website

From the manufacturer

From a retail store

From a phone recycling/refurbishing

company

35%

From a mobile phone shop

15%

1%

From a consumer electronic retailer



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23

Most consumers own new devices, but consumers in rural areas are more likely to own used or refurbished mobile devices

Although most consumers buy new devices, there is a market for used or refurbished phones in rural areas and among young consumers. Compared to other age groups, young consumers (16-24 years) are more likely to purchase used or refurbished phones, indicating a lower purchasing power among this age group.

Figure 10a. New vs used devices (by location)When you got your current phone, was it new or used?

Figure 10b. New vs used devices (by age)When you got your current phone, was it new or used?

0

20

40

60

80

100

80% 82%

2%

Urban RuralTotal

3%

17% 16%

74%

22%

3%

Used/refurbished Don’t knowNew

0

20

40

60

80

100

80%76%

81%

16-24 25-34 35-45Total

3%

17%21%

86%

13%

1%3%

16%

3%

Used/refurbished Don’t knowNew


Global Mobile Consumer Survey 2018 | The South African Cut | Device Usage

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Device Usage: Instant messaging, streaming, digital payments and fingerprint recognition


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Instant messaging is the preferred medium of communication for mobile consumers

In recent years instant messaging has replaced traditional text (SMS) messages as the primary medium of mobile communication among South Africans. This holds true across all age groups, with consumers aged 25-34 years being the largest users of instant messaging. Although instant messaging remains a firm favourite among South Africans, this medium of communication has started to lose its dominance compared to previous years.

TV and movie streaming has gained in popularity across all age groups. Given better 4G/LTE coverage and higher purchasing power in urban areas, consumers in these areas are much more likely than rural consumers to stream TV or movies on their mobile devices.

Figure 11. Phone usageIn the last 7 days, which of the following ways have you used your phone to communicate with others?

Figure 12. Other services (by location)Which of the following services offered by your mobile operator do you subscribe to/are you using?

0 10 20 30 40 50 60 70 80

58%

39%

15%

Social networks

Voice calls using the internet (VoIP)

Picture or video messages (MMS)

Voice calls using 4G/LTE network or Wi-Fi

67%

Emails

37%

1%

Other

51%

51%

51%

21%

7%

Group video calls

Video calls

Text messages (SMS)

Instant messaging

Voice calls

TV/Film streaming service

TV via cable or satelite

Fixed line voice calls

I am not aware that my mobile operator offers any of these services

Other0

5

10

15

20

2523%

24%

17%19% 19%

17%17%

14%13%

14%

18%

14%

17%16%

13%

Total Urban Rural



28


29

WhatsApp remains the most popular app

WhatsApp remains the most popular application across all age groups. While still the most used app, young consumers (16-24 years) are least likely to use WhatsApp. Social media apps are fairly popular among all age groups. Apart from messaging and social media apps, online banking, online product research/reviews and mobile money transfer are popular among South Africans. In recent years, e-commerce has also gained in popularity but is not yet among the top mobile services used by South Africans.

Figure 13. App usage (by age)Which of these apps do you use daily?

Figure 14. Other top uses for phonesDo you use your phone for any of these products or services?

0

20

40

60

80

100

75%83%

40%

62%

50%

32%37%

26%19%

21%30%

46%

23%

13%

24%

16-24 25-34 35-45

88%

60%

45%45% 45%

29%

20%14%14%

0 5 10 15 20 25 30 35 40

35%

24%

5%

Browse shopping website/apps

None of these

Make online purchase of a service

Pay for a product/service in-store (e.g.via Apple Pay, Android Pay)

39%

Transfer money to another individual in the same country

22%

3%

Transfer money to another individual located in a different country

30%25%

24%

20%

6%

Reserve or purchase online for store pick-up a product for pick-up

Interact with businesses via messenger apps

Make other online banking transactions (e.g. paying a bill through your bank, transfer money between your accounts

Check bank balances

Make an online purchase of a product

19%17%

14%12%

9%9%

Research a product/service

Pay for a taxi

Make a reservation/bookings

Pay for public transportPay for car parking

Read reviews about a product/service



30


31

0 10 20 30 40 50 60 70 80

47%

28%

Read the news

Stream films and/or TV series

61%

Use map for navigation

12%Listen to online radio

43%

39%

31%

28%

18%Obtain healthcare information

Watch video news stories on news apps

Watch videos shared on instant messaging networks

Watch short videos or live posts or stories (such as on YouTube or via social networks such as Facebook live, Snapchat, Instagram)

Stream/play music

0

5

10

15

20

25

30

24% 24% 24%24%25%

19%20%

13%

17%

20%20%18%

15%15%

21%

16-24 25-34 35-45

23%

25%

14%15%

26%

15%17%

25%

Netflix Google Music

News 24 ShowMax Cloud storage

None of the listed

Total

17%

Figure 15. Usage of content-related activitiesWhich of the following do you regularly use your phone to do?

Figure 16. Media subscription services (by age)Which of the following subscription services do you have access to?

Streaming services have gained traction among young consumers

Most consumers use their phones to watch short videos. Navigation apps are the most frequently used applications among consumers aged 25-34 years and 35-45 years. Overall, Google Music and Netflix are the most popular subscription services among South Africans. Netflix is in particular popular among urban consumers, reflecting better access to fast and more reliable internet services in these areas. While older consumers (35-45 years) are least likely to subscribe to a subscription service, they are much more likely to subscribe to news apps such as News24 compared to other age groups.



32


33

Contactless payments app offered by your bank

Pay by SMS

Masterpass0

5

10

15

20

25

30

35 32%

29%

17%15%

10%

None of these

Scan and pay app offered by a retailer

14%

7%

Contactless payments app offered by a mobile operator

Don’t know

0 10 20 30 40 50 60 70 80

27%

7%

Social payment app

71%

Online money transfer provider

I don’t transfer money using my mobile phone

24%

15%

12%

8%

3%

Facebook

App/solution provided by mobile manufactiurer or operationg system provider

Financial institution app (e.g. Visa, Mastercard)

Your online banking app

Mobile operator app/service

Figure 17. In-store mobile paymentsWhich of the following in-store mobile payment solutions have you used?

Figure 18. Mobile money transfer solutionsIn which of the following ways have you ever used your mobile phone to transfer money?

Digital payment platforms are gaining traction as alternative payment methods

Close to two-thirds of South African consumers indicated that they use some form of in-store mobile payments. Contactless payment apps offered by banks are the most popular mobile payment solutions. Non-bank apps including those offered by retailers and mobile operators are yet to gain traction in the South African market. Transferring money using an app offered by mobile operators is among the top five mobile money transfer methods, suggesting that there is an appetite for this service. Given WhatsApp’s popularity in South Africa, introducing a money transfer/payment feature similar to the one offered in India may hold the potential to disrupt the local mobile payments market.



34


35

0 10 20 30 40 50 60 70 80

48%

71%

Fingerprint recognition (via a fingerprint reader on the phone)

Eye/iris recognition (via the phone’s camera)

29%

26%

16%

Facial recognition (via the phone’s camera/cameras)

PIN or password authentication

Voice recognition (via the phone’s microphone)

0 10 20 30 40 50 60 70 80

34%

74%

To log in apps

To authorise money transfers to other people/organisations

28%

19%

To unlock my device

To authorise payments/purchases

Figure 19. Top authentication methodsWhich of these recognition features does your smartphone have?

Figure 20. Common uses for authentication technologyHow do you use the recognition features?

Consumers are embracing fingerprint recognition technology

While personal identification numbers (PINs) and passwords remain the primary security feature on mobile phones and apps, almost half of all smartphones in the South African market are equipped with fingerprint recognition technology. Especially older consumers (35-45 years) make use of this recognition technology, suggesting that this age group is more likely to have devices equipped with this technology, due to their higher purchasing power. Voice, facial or eye/iris recognition are yet to gain traction. These recognition features are most frequently used to unlock devices. South Africans still largely depend on passwords or PINs to log into apps or to authorise payments/purchases or money transfers on their smartphones.


Global Mobile Consumer Survey 2018 | The South African Cut | Emerging Trends

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Emerging trends: Data security and 5G


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39

0 10 20 30 40 50

44%

17%

My address

46%

My name

My purchase history

37%

34%

23%

19%

11%

My browsing activity that the sites you browse on are shared with a third party

My friends/contacts list

My phone number

My email address

My Photos

7%My health metrics (e.g.walking patterns, calorie intake)

measured by my phone/wearable device

Very concerned

Fairly concerned

Don’t know Not very concerned

Not at all concerned

0

10

20

30

40

50

36%

28%

39%

45%

32% 32%35%

13% 13%14%

27%

15%12%

20%

13%

16-24 25-34 35-45Total

10%

5%5% 4%5%

Figure 21. Sharing of personal dataWhich types of information do you think you already share with online companies?

Figure 22. Level of concern over shared personal dataTo what extent are you concerned about how the companies you interact with online, use your personal data?

South Africans are more concerned than their global peers on how their personal data is used

Most South African consumers believe that they are sharing, willingly or unwillingly, a significant portion of their private information with third parties online. Among the different age groups, consumers aged 35-45 years are concerned in particular about the sharing of their information online. Younger consumers (16-24 years), however, are less concerned about companies interacting with their personal data. Compared to the global average and other emerging market peers including Kenyans and Colombians, South Africans are more concerned about how their personal data is used online. It remains to be seen how the introduction of the Protection of Personal Information Act (POPI) will impact on these fears.

0

10

20

30

40

50

60

70

80

52% 52%

59%58% 60%57%

66%63% 64%64%

5% 5%

64% 64%

Figure 23. Global comparison of level of concern over personal data sharingYes, I am concerned most or all the time how companies I interact with online use my personal data



40


41

As soon as it is available

If I start hearing good things about it

Don’t know Eventually If it was a standard offering and there was no alternative

0

10

20

30

40

50

60

47%

41%45%

53%

23%24%

16%13%

11%

21%

14%11%

15%13%

16-24 25-34 35-45Total

18%

3% 3% 2%3%

23%


Figure 24. Switching to 5G (by age)When would you switch to a 5G network?

Most consumers would switch to a 5G network as soon as it is available

Close to half of South Africans would consider moving to a 5G network as soon as it becomes available. The age group 25-34 years is most likely to switch to 5G, while older consumers (35-45 years) are least likely to move to 5G. However, it seems that there is limited understanding of what the benefits of 5G technology would be for everyday consumers. It might be beneficial for communication strategies to focus more on services and benefits of 5G than the technology of 5G.

Global Mobile Consumer Survey 2018 | The South African Cut | Contacts & Contributors

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Contacts

Contributors

Mark JosephAfrica TMT LeaderDeloitte [email protected]

Grant ChivandireAfrica TMT Senior ManagerDeloitte [email protected]

Simon SchaeferManager: Africa InsightsDeloitte [email protected]

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.

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This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms or their related entities (collectively, the “Deloitte network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.

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global mobile consumer survey 2018 the south african cut · 2020-05-13 · global mobile consumer...

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