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IF YOU'RE you're in South Africa, you may have noticed billboard and television adverts with little more than the word “Heita!” to explain what they're marketing.

It emerged over the weekend that this is in fact the brand Telkom Mobile will go to market with - as reported by technology news website TechCentral. The new brand is clearly aimed at consumers where it seems Telkom will begin its foray into mobile.

Last week journalists received an invitation to an event being held next week in Johannesburg. The invite came from Telkom [JSE:TKG], but had little detail aside from time and place.

Given the advertising campaign and previous indications from Telkom, it seems obvious that this will be the press launch party for Telkom Mobile - or Heita!

The new network is being kickstarted with about R5bn in investment from Telkom. It has built its own wireless infrastructure and also has a roaming agreement in place with MTN that will allow Heita! customers to stay connected when out of range of Telkom's base stations.

Of course, Telkom will also be tackling business customers with its mobile solutions, but no clues have emerged as to the brand or tactics it will use in that department. For now it seems obvious that consumers are key to Telkom's strategy - a refreshing change from the usual corporate mentality in South Africa where low-hanging enterprise customers are always a primary target.

And in the consumer market Telkom has stiff competition.

Vodacom Group [JSE:VOD] is the market leader in South Africa, with MTN Group [JSE:MTN] making a renewed and fierce play for hearts and minds. In third spot is Cell C with its new network, new branding and new approach to customers which seem to be gaining traction.

Telkom will need something special to interest consumers, and perhaps a focus on the prepaid market is where it will begin.

In that segment there are no contracts to worry about and Telkom can focus on brand awareness and pricing. It may also look to institute a buy-out offer for existing contract customers, whereby Telkom Mobile essentially pays up the contract a customer has with a competitor and then takes it over.

But there will be more to compelling local customers than just pricing. South Africans are wary of issues surrounding coverage and signal quality. We're tired of dropped calls, not just high bills and I can't imagine anyone switching to a less reliable network.

Customer service will also be key as a common bugbear South Africans have with their service providers.

But there is no doubt as to space for a fourth player in the market. In Kenya there are four operators - including Telkom Kenya Limited operating as Orange Kenya. Ghana and Nigeria both have five.

If we can draw parallels from these and even less disparate European markets in terms of maturity, it seems that four is a healthy number. Not many countries support five, while fewer still have six or more. But when you drop down to two or three it challenges competitiveness in the industry. These seem to be fair conclusions.

Analysts agree that there is space for Telkom, and that it would also have a favourable effect on the market from a consumer perspective.

Whether or not it is the right move for Telkom is a different matter and not something we will deliberate upon here.

 - Fin24.com
 
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