The false promise of mobile number portability

In Africa, we experienced a huge sense of release and empowerment when GSM arrived a decade ago. The benefits were intrinsic and easily demonstrable. Before GSM, we couldn’t talk to each other, but since the,we haven’t been able to stop.Then came the era of quasi-competition. In this period, the earliest entrants had the finance for infrastructure rollout and had the advantage over their late competitors.
Mobile users are likely to  continue hedging their bets by holding two sim cards.
Mobile users are likely to continue hedging their bets by holding two sim cards.

In Africa, we experienced a huge sense of release and empowerment when GSM arrived a decade ago. The benefits were intrinsic and easily demonstrable. Before GSM, we couldn’t talk to each other, but since the,we haven’t been able to stop.

Then came the era of quasi-competition. In this period, the earliest entrants had the finance for infrastructure rollout and had the advantage over their late competitors.

Coverage plus adequate quality plus cheap handsets produced ubiquity. Ubiquity produced a sense of belonging, particularly if national character was celebrated in marketing campaigns.

And in Africa, we love to belong. So the early bird networks had the benefit of a vast member-get-member movement, without the marketing hassle of having to incentivise people.

In general, there was little investment in technological improvement during this phase, beyond rolling out more dialling codes to accommodate more customers.

There were other innovations of course, as in Kenya with Safaricom’s much-lauded M-Pesa money transfer product. But by and large, if your network had poor sound quality and call drops a decade ago, it still has them today.

And throughout, there was a concerted attempt to make the cost of mobile telephony as difficult to understand as possible. We might call this obfuscatory marketing.

Impenetrable walls of price offers and time of day parameters were thrown up (this is global practise in the category).

THE BIG LIE – ‘Pay as you go is more affordable than Post Paid Contracts’ - was swallowed by millions. They took it to mean cheaper, which is not the case. It may be more controllable, but it is not cheaper.

Such marketers as there were in telecoms in Africa applied their skills to the very tricky task of painting the continent’s infrastructure in a variety of brilliant hues, and making billboard contractors very rich.

Now we appear to be in a third phase of GSM development. Let’s call it ‘The Reckoning’. In the second decade of this new century, consumers should anticipate greater clarity.

I don’t mean on their mobile line, although in many countries this would be most welcome. I mean in terms of fewer companies, a more sincere consumer focus, and simpler and more affordable pricing for voice and data. Better deals, if you like, and more relevant services.

It’s an era that the continent’s GSM providers are entering without the advantage of clearly differentiated brands. If you doubt me, sit down and write in one sentence what your network brand means to you.

And then, if you can, what the other networks stand for. Bet you can’t.

This era began with some scything airtime price cuts that have chopped the cost of conversation by an average of 65 percent.

And this would appear to be unsustainable, if we are to judge from newspaper coverage of angry network M.D’s. 

Soon, many African countries regulators will oblige networks to offer number portability.

In Australia, number portability arrived in 2001 and in marketing terms was a damp squib. Market leader Telstra prepared for a competitive onslaught, but ended up shelving most of its plans.

Virgin Mobile, as a new entrant made lots of noise on TV and outdoor to redefine value expectations. Orange offered flat rates.

But post portability estimates reckoned that only 30,000 subscribers had actually changed network.

In Turkey, portability came in 2009. Turk Telekom experienced a 31 per cent decline in fixed line business, but its mobile arm Avea only netted another 300,000 subscribers. And they were the biggest winners.

Vodaphone’s Turkish network was still plagued by network and sales outlet problems. And Turkcell, the market leader saw marginal subscriber variation.

Number portability seems to me to be the right sort of action for a regulator. Anything that improves consumers’ ability to make choices should be encouraged.

But despite some early advertising claims, I very much doubt many mobile consumers will move their business. Most will continue to hedge their bets by holding two sim cards.

With low differentiation, broad target marketing, and category conventional behaviour – why on earth would anyone move network?

The author is Chairman, Young & Rubicam Brands Africa kiongozi@yrbrands.com
To comment on this article, send a tweet
to harrisoncj on
www.twitter.com

ADVERTISEMENT

 

Have Your SayLeave a comment