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I Recently Came From South and Mid Africa

I Recently Came From South and Mid Africa

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Published by Carlos Valdecantos
Strategic segmentation as a marketing tool. More info at consultantvalueadded.wordpress.com or www.group-mmc.com
Strategic segmentation as a marketing tool. More info at consultantvalueadded.wordpress.com or www.group-mmc.com

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Published by: Carlos Valdecantos on Jan 03, 2009
Copyright:Attribution Non-commercial

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06/17/2009

 
I recently came from south and mid Africa, where I met a couple of VPs responsibles for the African Operations of a major telecomoperator with presence in ten different countries. I was asked foradvisory on three specific topics; one of them was double simManagement and it’s effect on the ongoing downturn evolution of their ARPU levels.We had an interesting and constructive session. The highlightswrapped up alter the meeting are:
Double simmers represent a significant community in most of the African markets where the total penetration rate hasn’treached a maturity level. It will be growing in the next 2 years.
Most of these operations’ customers unveil a huge sensitivityto price, moving from one operator to other just for the sakeof a premium discount
 The loyalty of these customers to the SIM is thereforeinexistent, preferring these “dustbin simmers” to get anotherSIM and renew the promotion better than any promo designedto maintain their current number
 The cost of sales and acquisition of these clients is thereforehigh, having to control the distribution and channelmechanisms to avoid revenue loss
 The churn contribution of this type of clients is very highmaking it necessary for the operators to define expensiveretention and loyalty strategiesAs I am telling the rest of my clients in the region, the double simManagement exercise should consider two different levers: 1) Roomin the country to develop our market share and 2) share of net billedtraffic of our SIM base. The key question agreed was that while the telecom markets haveroom for growth, the operators will maintain their priorities onacquisition better than on trying to get as much as billed traffic aspossible. Profitability might not be a problem now, considering thatthere are ARPU stimulation and retention strategies that will help uson increasing our net share of billed traffic when necessary. This might be different depending on the market. It is not the samebeing Orange in Uganda (5th operator in an already populatedtelecom market) than MTN in Sudan (2nd placer in a country with 5net million clients to come to the market) or MTC in Namibia (2Mcustomer market with low room for growth and just 2 players, one of them with more than a 80% of M.S.). The trade-off between these two levers will define the best way tohandle this hot topic. Most of the countries have not yet crossed thewireless subscriber penetration mark of a mid-mature country butthey are all reporting unrealistic market shares primarily due to

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