2011 Telco Innovation Study
South Africa
This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for
distribution outside the client organization without prior written approval from InnovationAgency. This material was
produced by InnovationAgency based on client interaction; it is not a complete record of the discussion.
About the Innovation Study
2011 Innovation Study Results
About the Innovation StudyPurpose of the Innovation Study
Research methodology
Respondent demographics
Innovation Study questionnaire
Page 4
Purpose of the Innovation Study
In the highly competitive market that organisations in South Africa find themselves, ameans of differentiation is of paramount importance. Innovation is seen as one of theprimary drivers in achieving this differentiation.
This study investigates a number of aspects surrounding the level of innovation beingachieved by organisations, as perceived from a localised end-user perspective. Thestudy also looks at the level of customer satisfaction with their telecommunicationsprovider (Telco); and what would entice a customer to switch from one Telco toanother. The market research conducted highlights which Telcos are perceived to bethe most innovative in the industry. Further analysis delves into why this is so.
The study also serves to create a greater awareness around the concern that Telcosneed to be responsive to customers’ emotional needs. The core purpose underpinningthis initiative is a strategy for managing the information acquired and turning it intoinsights that empower customers in new ways.
Page 5
Research methodology
This report provides insight on the study conducted during 2010. This is anadministered survey conducted during various programs and workshops offered byInnovationAgency.
The survey was administered in a controlled manner. Survey questions were designedto be opened-ended in nature, and served to gauge individual perceptions around thelevel of innovation achieved by institutions from an end-user perspective.Respondents were not given information and/ or definitions of the survey questions.
Data collected was grouped and analysed and keywords created as a means tographically represent the results of study. The 2011 Innovation Study consisted of638 respondees.
Page 6
Innovation Study questionnaire
The study questionnaire consisted of the following questions:
•Which Telco is the most innovative?
•Why did you rate the Telco as the most innovative?
•What lessons can be learnt from innovative Telcos?
•Have you switched Telco in the last 12 – 18 months?
•Why did you switch Telcos?
•Why have you not switched Telcos?
Key thoughts
Page 7
Respondent demographics
• Study respondents represented a widespread of individuals, from various backgrounds
Female44%
Male56%
Gender split
African19%
Asian15%
Coloured
9%
White57%
Ethnic classification
0%
5%
10%
15%
20%
25%
30%
20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59
Age distribution
0%
5%
10%
15%
20%
25%
Income distribution
2011 Innovation Study resultsMost innovative Telco
Reason for rating the Telco innovative
Lessons from innovative Telcos
Switched Telco in the last 12 – 18 months
Reason for switching Telco
Reason for not switching Telco
Key thoughts
Page 9
Most innovative Telco
• Newcomers into the space will probably find it difficult gaining market share, in a market dominated by the Vodacom, MTN and Cell C
• Vodacom is perceived to be the clear leader in innovation, and MTN is the distant second
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Telkom
Virgin Mobile
Neotel
None of them
Cell C
MTN
Vodacom
Key thoughts
Page 10
Reason for rating the Telco innovative
• Marketing and brand positioning is also a clear indicator when customers consider how innovative a Telco is
• “Products” are at the top of the list for rating a Telco innovative, ahead of “customer service” and “technology”
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Partnerships established
Wide appeal
Tarrifs
Open to new ideas
Continuously improving/ changing
Perception
Market leaders
Adapt to changes
Innovative culture
Technology
First to market
Network
Client solutions
Customer service
Company growth
Marketing
Products
Key thoughts
Page 11
Lessons from innovative Telcos
• The prominence of customer centricity in the study implies that customers are looking for products and services to suit their specific needs
• Customers are also seeking greater innovation from their Telco’s. This may be signaling greater differentiation by customers, from their Telco’s
• The top lesson that respondents gave suggests that company brand positioning and how well they are known clearly influences customer perception
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Tarrifs
Forward looking
Synergistic partnerships
Business model
Time to market
Competitiveness
Technology
Continuously improve
Products
Challenge the status quo
Encourage innovation
Take risks
Adapt to changes
Customer service
Company growth
Individualised solutions
Marketing
Key thoughts
Page 12
Switched Telco in the last 12 – 18 months
• The introduction of number portability does not seem to have added to the number of customers switching Telco, suggesting that there may be more reasons for customers not switching
• Less than one sixth of the respondents had switched Telco, despite the introduction of number portability
Yes9%
No91%
Key thoughts
Page 13
Reason for switching Telco
• Results indicate that there may be more than one reason that drives customers to switch
• Customers don’t seem to be deterred by cost implications for the service they want
• Service levels were a significant factor for most of the respondents in their decision making process
0% 5% 10% 15% 20% 25% 30% 35%
Telco was not innovative
Network
Cost factors
Controlled by employer
Products
Service levels
Key thoughts
Page 14
Reason for not switching Telco
• Despite the availability of number portability, customers indicate that they are finding switching too cumbersome a process
• Results also indicate that customers find it hard to differentiate the offerings from each Telco
• The results also suggest that customers chose to stay with one provider for more than one reason, but service levels were the most important
0% 5% 10% 15% 20% 25% 30%
Cost factors
Tried but couldn't
Used to current Telco
No time to
Intend on switching
Don't want to loose number
Locked in contract
Loyal
Products
Controlled by employer
No reason to
Service levels
All the same
Too much effort
Satisfied with Telco
About UsWe live in a socially aware society whereinvolvement across a collective workforcecommunity is used to drive innovation. SocialBased Innovation approaches pave the way toa more networked and integrated means ofmanaging innovation. We are driving thisevolution forward.
United Kingdom Uganda
London81 Oxford StreetLondonW1D 2EUTel: +44 (0) 207 903 5410Fax: +44 (0) 207 903 533
SystemicLogic East Africa Limited Plot No. 254Albert Cook Road, Rubaga, Kampala,P. O. Box 70770,Clock Tower, KampalaTel: +256 705 707
Australia
MelbourneLevel 50120 Collins StreetMelbourne, 3000Tel: +61 (0) 3 9225 5264Fax: +61 (0) 3 9225 5050E-mail: [email protected]
SydneyLevel 3450 Bridge StreetSydney, NSW 2000Tel: +61 (0) 2 8216 0909Fax: +61 (0) 2 8216 0701E-mail: [email protected]
South Africa Global Contact
JohannesburgPeregrine Building6a Sandown Valley CrescentSandton, 2194Tel: +27 (0) 11 783 0009Fax: +27 (0) 880117063161E-mail: [email protected]
www.innovationagency.com