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Cutting the red tape

Apr 21 2011 00:00 Simon Dingle

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Five minutes of media exposure over the past week should have been enough for you to catch one of Vodacom’s “going red” advertisements. With R200m spent on the campaign, South Africa gets the message: Vodacom Group [JSE:VOD] has dropped its blue look for a new red alignment with the branding of its parent company, British cellular giant Vodafone. But there is far more to the changes at Vodacom than meets the eye.

The branding is the visual side of Vodacom’s transition. With 65% of the cellular group held by Vodafone, it was only a matter of time before things went red. It’s surprising Vodafone didn’t also force a name change – and, rest assured, it wanted to. Vodacom CEO Pieter Uys and his team managed to fight off that one, ensuring SA’s oldest cellular network kept its name even as it changed its make-up.

The more important changes are behind that red façade. At a media briefing last week, ahead of the big rebranding launch, Uys explained his team had been hard at work restructuring its management. He added he’d been touring the country meeting Vodacom staff to rejuvenate the company.

Uys has left his office behind – an elaborate corner unit bequeathed to him by company founder Alan Knott-Craig – and now occupies a simple desk in an open plan office at Vodacom’s corporate campus. I’m told his new desk is indistinguishable from any other in the office.

Uys clearly wants to be hands-on and involved. He’s always been at the forefront of Vodacom’s technical progress and doesn’t strike me as someone who enjoys dolling out commandments from on high – he likes getting his hands dirty.

The more cynical analysts have a different interpretation. Their version involves Vodacom flattening out its management structures to better deal with integration with and firmer management from Vodafone. It’s the transition of Vodacom from an autocratic group to a division of Vodafone.

The real reason is simpler than that. Uys says Vodacom had duplicated many management functions because it dealt with various markets. For example, the clean-up meant merging various human resources departments into one, centralised management unit – without any heads rolling. In fact, one of the changes ended in creating a job.

And restructuring its call centre operation will move temporary staff into permanent positions. A statement last week said: “Call centre agents who had been contracted to Vodacom via third parties would instead be contracted to specialist call centre companies. By creating centres of excellence, managed by experts in their particular area, these changes are intended to improve call centre efficiency and knowledge levels, and ultimately result in an improved customer experience.”

Essentially, that will see 700 temporary staff become full-time employees at those third parties and, hopefully, provide better a service to Vodacom’s customers.

Vodacom is also at war with competitor Cell C, who used its rebranding to rub comedian Trevor Noah’s face in it. In the most controversial new reply by Cell C, Noah walks past an old, broken-down blue car half-painted red (Vodacom) before walking up to a new, black Ferrari (Cell C). Vodacom is angry and is dragging Cell C off to the Advertising Standards Authority.

But the truth is while Cell C does have a flashy new network, so does Vodacom. The now red company switched out of its tower infrastructure last year and is employing the same HSPA+ technology Cell C has based its new network on – albeit at a less ideal frequency.

With new management structures, successful maintenance of its market lead in SA and now stronger involvement from its British overlord, Vodacom is more than just a rebranded old company. It’s the lean, mean African division of a cellular empire that’s dominated almost every market it’s addressed.

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