2010 Telco Innovation Study
South Africa
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produced by InnovationAgency based on client interaction; it is not a complete record of the discussion.
About the Innovation Study
2010 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 2010 Innovation Study consisted of456 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
Female41%
Male59%
Male vs. Female
Coloured13%
Indian22%
African28%
White 37%
Population group
0%
5%
10%
15%
20%
25%
30%
20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+
Age Distribution
0%
5%
10%
15%
20%
25%
150k -250k
251k -350k
351k -450k
451k -550k
551k -650k
651k -750k
751k -800k
850k -1mil
1.1mil -
2.6mil
Income Distribution
2010 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
Page 9
Key thoughtsMost innovative Telco
• The mobile players are seen to be the more innovative ahead of the fixed line players
• Vodacom is perceived to be the clear leader in innovation, and MTN is the distant second
0%
10%
20%
30%
40%
50%
60%
Econet Wireless
Zim
Telkom Virgin Mobile
Neotel None Cell C MTN Vodacom
Page 10
Key thoughts
• The cost factor does not rank highly on the list, suggesting that customers are willing to pay for the products and service they want
• “Products” are at the top of the list for rating a Telco innovative, ahead of “customer service” and “technology”
Reason for rating the Telco innovative
0%
5%
10%
15%
20%
25%
30%
Page 11
Key thoughts
• The prominence of customer centricity in the study implies that customers are looking for products and services to suit their specific needs
• The top lesson that respondents gave suggests that company brand positioning and how well they are known clearly influences customer perception
Lessons from innovative Telcos
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Page 12
Key thoughts
• 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
• The relatively low percentage of respondents who had switched may be seen an indication of the satisfaction levels experienced with their Telco providers
• Less than one sixth of the respondents had switched Telco, despite the introduction of number portability
Yes14%
No86%
Switched Telco in the last 12 – 18 months
Page 13
Key thoughts
• 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
Reason for switching Telco
0%
5%
10%
15%
20%
25%
30%
35%
Page 14
Key thoughts
• Despite the availability of number portability, customers indicate that they are finding switching too difficult
• 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
• 5% of the respondents indicated to have been unable to switch, presumably due to contractual obligations. These respondents also indicated that they intend on switching
Reason for not switching Telco
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
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