There is a need to change the telecom paradigm

For those keenly observing trends, the entry of a third national telecom operator last December has been a cause for drama. It was just a matter of time before things were bound to get hot.

For those keenly observing trends, the entry of a third national telecom operator last December has been a cause for drama. It was just a matter of time before things were bound to get hot.

The end beneficiary is the customer especially those who previously have been locked out from access to affordable mobile service.

The liberalization of the sector is now ensuring a more level playing field in which customer is treated as king. As the three operators engage in a bare knuckle war for market-share, the kind of price movements that have been witnessed is an indicator of how high the stakes are.

With penetration rates standing at less than 3 million it can be said that there is wide room for operators to make a difference in terms of value offerings to the customers who now have wide array of choice. However the targets set by Rwanda Utilities Regulatory Authority (RURA) of the sector achieving 6 million by 2012 means that the operator’s market capture strategies will have to consider several factors unique to this market.

One such factor will be the consideration of the demographics of the local population which will form the bulk of the next 3 million customers.

This segment of the local population not covered so far is composed of mostly rural dwellers from the very base of Rwanda’s economic pyramid. These are the rural folk-the “baturage”.

These are the kind of consumers who will see more valued opinions expressed directly to them. This is the kind of segment that is mostly oral rather than literal.

While looking at how the pitched battle lines will be defined, it is likely that the three operators will most probably spend millions of francs on elaborately conceived advertising campaigns. However for a good chunk of such new customers residing in say Rusizi or Gicumbi or Nyamasheke, what will sway their minds will be simple, but free word of mouth recommendation from a trusted source.

This is attributed to the fact that as opposed to the kind of  buzz generated by traditional marketing, word of mouth will mostly cut through such market segments more quickly and effectively.

Marketing experts say that word of mouth can contribute to between 20 to 50 percent of all purchasing decisions. These experts further say that word of mouth influence is greatest when consumers are buying a product for the first time or when products are relatively expensive as is the case with mobile phones.

These are actually factors that tend to make the muturage conduct more research, seek more opinions, and deliberate longer than they otherwise would.

One way of getting on board an additional 3 million subscribers would be for the three players to re-channel the huge traditional marketing budgets into a new form of sales promotion based purely on word of mouth.

Why not give away the handset for free to kick start a new way of life for these folks? The message will spread like a bush fire gutting dry savannah grassland. This way the 3 million additional subscribers can be quickly brought on board.

Done that way there will be no need of investing in expensive advertising. Such a campaign can even be tied to several village initiatives such as the Umurenge SACCOS mushrooming all over rural Rwanda.

There seems to be no other way of getting such rural masses on board given that it is only less than 20 months left before RURA will start assessing whether set targets have been met.

ojiwah@gmail.com

Fred Oluoch-Ojiwah is a journalist with The New Times

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