MTN to take the fight to Vodacom

2012-11-15 09:00
MTN is determined to take on Vodacom. (Duncan Alfreds, News24)

MTN is determined to take on Vodacom. (Duncan Alfreds, News24)

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Cape Town - Competition is tight among South African mobile operators and MTN has made no bones about their intent to take on Vodacom for the top spot in the South African mobile market.

"In South Africa we've got some work to do; we're not comfortable being number two, we have an active plan to take market share from Vodacom. We're busy executing that plan and we're starting to see some rewards on that now," Mike Fairon, general manager of product, services and innovation at MTN told News24.

He insisted though, that compared to Vodacom, the company was the top operator in Africa.

"You have to look at the two companies at a holding level and make your judgement on predominant operator on the continent and there the facts will speak for themselves.

"We might be number two to Vodacom in South Africa, we certainly are number one on the continent," he said on the side lines of the AfricaCom technology conference in Cape Town.

Strategy

Market penetration in South Africa is over 100% and Fairon said that MTN's strategy included revenue from voice and, as an indicator of the competition between operators, poaching customers.

"Even from a voice services point of view, there is growth, so you can go and capture market share from competitors, and we've shown this year that if you create the right value propositions, we can go and attract new customers to MTN," he said.

The company though, isn’t only after numbers. It wants customers who generate revenue growth.

"For us, it's about attracting customers away from competitors, but those customers must be quality customers. They must have a certain tenure on the network; they must generate revenue on the network," said Fairon.

He insisted that the operator rewards customer loyalty.

"We have programmes in place that will reward them for tenure - so our loyalty programme rewards you for tenure; rewards you for spend, so it's a symbiotic relationship for customers that are generating certain revenue for us and were creating value propositions for them."

Data revenue

The top two operators in SA have recently announced a Long Term Evolution rollout of higher speed wireless services of over 40mbps, and are hoping that it will attract customers to their networks.

It is expected that the higher speeds will also boost data revenue for the companies as customers consume more rich media on smart devices.

In a thinly disguised dig at Vodacom, he said that customer numbers alone did not make an attractive business model.

"Having hundreds of thousands of customers that don't generate a lot of revenue affects the profit margins."


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