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SA telcos struggle to satisfy consumer expectations

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 20 Apr 2022

While the local telecoms sector worked towards augmenting its network capacity with additional fibre and wireless deployments in 2021, operators still have a way to go in meeting consumer expectations.

This is according to the latest South African Telecommunications Sentiment Index, conducted by DataEQ (formerly BrandsEye) in partnership with Deloitte Africa.

The index reveals the telecoms industry ranked last in terms of consumer sentiment for the second consecutive year, when compared to the banking, insurance and food retail industries.

In terms of individual telco rankings, having tracked close to two million social media posts about Cell C, MTN, Rain, Telkom and Vodacom throughout 2021, the index saw minimal movement in rankings from last year’s index.

According to the survey, MTN outperformed rivals by producing the largest year-on-year net sentiment improvement, while Rain’s uptick wasn’t enough to see a ranking shift.

The biggest improvement in both reputational and operational sentiment came from Telkom, which saw the partly state-owned telco climb the rankings to share second place with Vodacom.

Bucking the trend, Cell C was the only provider whose net sentiment worsened in 2021, which saw the telco slide down one spot in the ranking.

While conditions have been trying across most sectors in recent years, Gill Hofmeyr, Africa TMT industry leader at Deloitte, notes telecom 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,” explains Hofmeyr.

Data provided by load-shedding mobile app EskomSePush shows load-shedding was implemented on a total of 45 days in 2021. According to the index, over half of these days also saw unusual volumes of network complaints from telcos, evidencing the negative impact of load-shedding.

Of the improved sentiment from 2020 to 2021, DataEQ MD Melanie Malherbe notes that 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.

“Considering that telcos’ efforts in 2021 did not translate into an improved customer experience when compared to 2020, this remains a key potential area for differentiation going forward,” adds Malherbe.

As network providers continue to delve deeper into the financial services space, this year’s index also includes a dedicated analysis of telcos’ adherence to the Financial Sector Conduct Authority’s regulatory framework. Poor response to customer conversation in this regard not only impacts a brand’s reputation but could also pose a market conduct risk.

“Beyond these rising regulatory pressures, the results indicate telcos lag 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 concludes.