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IN THE last few months South African internet service
providers have announced further reductions to broadband prices and introduced
other breakthrough services for their customers. Unfortunately these things
always seem to come with caveats and limits that are not made immediately
obvious.
FNB Connect, the innovative internet service provider wing
of First National Bank, introduced free access to internet video service
YouTube for its subscribers last month. This was an amazing announcement as
YouTube can be bandwidth intensive.
YouTube is a big deal in my house. My young children, being
3 and 6, have learnt that many of their favourite television programmes are
available on YouTube and often ask to watch them that way. Free access to
YouTube would have made me switch from my current ISP to FNB Connect in a
moment.
Alas, the free access was only for the month of June, after
which things go back to normal.
This week Telkom [JSE:TKG] consumer mobile brand 8ta made a major
announcement, introducing a 10GB 3G data bundle for R200 per month with the
option of paying an additional R100 for an extra 10GB to be used during the
early hours of the morning.
This would make 8ta the cheapest provider of mobile
broadband in South Africa. But wait - it's just a promotion, even if 8ta
wouldn't confirm when the special will end.
It's also important to note that the offer will only be
active in areas where Telkom has built its own 8ta infrastructure. The network
runs on MTN Group [JSE:MTN] in other areas where the special will not be available.
It's very difficult for South Africans to make buying
decisions when we can't be sure of the conditions. We would like to choose the
best provider for the best price, sign up and then carry on with our lives.
Instead, I find myself constantly chopping and changing
between service providers as these announcements are made and service
deteriorates on networks that are overloaded during times of promotion. I'm now
at the stage where I don't mind paying a bit more just to not have to worry
about it.
When Cell C shook up the mobile broadband market last year, many
South Africans switched to the service. Cell C still faces challenges in many
areas of South Africa, however, making it difficult to rely on the connection.
It works like a dream at my office but I don't have coverage at home, for
example.
Then Vodacom Group [JSE:VOD] dropped its prices, then MTN followed suit, now
8ta has better prices, but only for a limited time. Meanwhile at home I have to
rely on ADSL, where my uncapped provider leaves a lot to be desired; I switched
to FNB Connect for June, but now have to switch back or look for the next
amazing limited-time offer.
I suspect many South Africans feel the same confusion.
Promotions are introduced and customers flock to the
service, which then breaks down under the load. And we're off to the next
provider with a big announcement.
Successful business is about retention. Winning new business
through promotions is a great idea, but you need those customers to stick
around. You also need to be sure that you can support growth in subscribers
before unleashing an unbeatable special.
A better approach would be to apply some honesty and
acceptance of what is really possible. You might not be able to be cheaper than
the other guys - but perhaps the quality of your network is better. If network
reliability is an issue, then address service. I suspect many South Africans
would be willing to pay a bit more if they received better treatment from call
centres and other touch points with service providers.
Give us certainty that we're getting the best bang for our buck. Business has proven time and time again that you don't have to be the cheapest player on the block. Customers will pay for service and convenience.
If the best you can do is a short-term promotion and your
network can't support the growth, then expect to fly by night. You'll be the
bee's knees until the promo ends or your network breaks down - and then all the
gains made from the special will cease to matter.
