Converged telecoms operator Neotel has responded to heavy criticism of its consumer focus with a complete revamp of its core offerings, but analysts are adamant there is still room for improvement.
Among the new offerings, Neotel has introduced identical voice tariffs for prepaid and postpaid packages, free evening and weekend on-network weekends, and a new entry-level data package for R99 per month.
The company has also deployed a billing system which it says will improve billing accuracy and information and overall call centre resolution turnaround time.
Neotel MD Ajay Pandey yesterday confirmed the revamp is a direct result of feedback from disgruntled consumers and industry criticism, some of which stemmed from ITWeb's investigation into whether the operator was failing the consumer, he noted.
At the time, analysts lashed out at the operator, arguing that it had failed to deliver on the expectations of a second national operator.
WWW Strategy MD Steven Ambrose argued that Neotel is playing the role of a competitive wholesale provider of connectivity and international voice minutes, and leaving the entire domestic and consumer market, including most of the SME space, to Telkom.
Neotel further exasperated the criticism by admitting its consumer business was not a top priority and would ideally only make up 10% of the company's preferred revenue mix. Ambrose again criticised the operator, saying it appeared to be fading into complete insignificance in the consumer market.
Good intentions
However, Pandey yesterday argued that Neotel takes its commitments to the consumer market extremely seriously and that the company's new offerings would reflect that.
Frost & Sullivan industry analyst Protea Hirschel agrees: “Neotel appear to not only be listening to the perceptions of it in the industry but to the reality of those who use its services and products.”
Despite the renewed focus on its consumer offering, Neotel will continue executing a strategy of minimal focus on the consumer business.
Same strategy
Pandey notes that Neotel's overarching strategy regarding a 10% consumer revenue focus remains. “Our consumer focus may not be a headline story but it is an important space for us.”
He argues that the company could not be everything and anything to everybody. Instead, Neotel will concentrate on fewer areas but would do so in sharp focus to deliver competition and value to the market.
Pandey previously clarified that the key focus of the business is in the enterprise arena. “We will continue to do what we are good at and deliver on our strengths.”
Hirschel argues that Neotel must concentrate on staying in business, even if at the expense of a smaller consumer focus. “Neotel will serve the consumer better if they do stay in business,” she points out.
Ambrose is of the view that Neotel's consumer approach is still too tentative. “While price reductions and a more rational approach to prepaid and bundles is good for the consumer, Neotel have not made any bold moves that would make their offerings much more compelling than before,” he argues.
Room for improvement
“Neotel need a complete rethink on their consumer strategy, with clear, simple, and very cost-effective solutions, to both the voice and data markets,” advises Ambrose.
“Their new strategy must also be heavily retail-focused and despite their stated inability to compete with the 'big boys', should they wish to play in this market, and compete effectively, they will have to play the game that exists out there.
“If they don't, their only solution is to concede defeat, and leave the consumer to the other competitors entirely. The telecommunications space is not very forgiving of undifferentiated and under-marketed solutions,” maintains Ambrose.
Hirschel agrees, and argues that Neotel must still focus on expanding its distribution channel if it is going to be successful in the consumer space.
However, part of the revamp includes a more extensive distribution channel. Neotel recharge vouchers can currently be purchased at Sasol forecourt petrol stations as well as Neotel stores, and will soon be available through additional retail outlets. Discussions are also under way with financial institutions to allow airtime to be purchased via them, notes the company.
The changes are a reasonable start, and do indicate Neotel is at least trying to compete and offer value, notes Ambrose.
But he argues that these changes are not significant enough, and will not substantially increase consumer adoption of Neotel services in the voice or data markets.
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