Mobile connectivity in South Africa has grown at a fast pace since 1994 when the first mobile phones became available in the country. Since 2020, the usage of mobile devices has dramatically increased with social distancing and lockdown measures.
This situation has evidenced areas of improvement of mobile services: price, loyalty and coverage. Data in Africa is expensive, loyalty to mobile operators is close to inexistent, and users have multiple SIM cards due to lack of coverage in some areas and to take advantage of temporary discounts.
During the lockdown, the average network speed of South African mobile operators increased thanks to additional spectrum allocated temporarily to telecom companies by the Independent Communications Authority of South Africa (ICASA). But even so, some players underperformed. Telecom company Rain decreased its download speed due to network congestion in oversubscribed areas where the company quadrupled its sign-ups with cheaper services.
Mobile operators don’t need to sacrifice quality over price if they can manage their demand peaks with proper management of their mobile network performance. The industry has reached enough maturity and should rather adopt a network performance maximizer for mobile operators. In this way, they can build loyalty through the quality of service instead of starting a price war.
Rise of mobile operators in South Africa
South Africa lived a shifting year in 1994 when the country held its first mixed-race elections. The same year Nelson Mandela became President-elect, the first mobile phones were introduced in the country by Vodafone and MTN. At first, mobile phones were luxury items affordable only by the wealthiest. Fast-forward to 2019, 19 out of 20 South Africans own a mobile device according to the Pew Research Center.
Mobile penetration has led to an increase of Internet subscriptions focused on smartphones and tablets. For instance, the ICASA reported that mobile cellular data subscriptions have increased 13.9% in the last five years. Other services for mobile have grown in the same period. Meanwhile, fixed broadband subscriptions have dropped. South Africans prefer to connect from their smartphones.
The mobile industry is a substantial generator of GDP in Sub-Saharan Africa, and South Africa has stood out in the region. According to the estimates, the mobile industry contributed to 4.3% of SA’s GDP in 2006, and doubled to 8.6% of SA’ GDP by 2020. In this scenario, mobile network performance is an important factor not just for mobile operators, but also for the common people.
Source: GSMA Intelligence
Mobile operators leading network experience in South Africa
Together, Vodacom and MTN control 75% of SA’s mobile market shares (down from 95% in 2005). ICASA estimated an approximation of 3,173 in the Herfindahl Hirschman Index, where a measure above 2000 is already highly concentrated. In 2018, TelKom and Cell C accounted for 10% and 16% of the market share respectively.
Vodacom and MTN have achieved the best mobile experience in South Africa for a long time, according to monthly reports conducted by Opensignal. The mobile analytics company pointed out that MTN leads the mobile experience for Video, Download Speed, 4G availability, and Upload Speed, and drew with Vodacom in Games Experience and Voice App experience. Meanwhile, Vodacom has an advantage in 4G Coverage Experience. In the past year, the main South African companies launched 5G networks with the temporary spectrum.
Source: Mobile Network Experience Report August 2020, South Africa. Opensignal.
In its 2020 Mobile Network Quality Report, MyBroadband highlighted that MTN has the best mobile network in South Africa. However, the leading position didn’t come without sacrifices. MTN underperformed Vodacom just one year ago.
Most mobile companies learned from MTN and started to improve their service in the country. In March 2020, Opensignal noticed the four main operators in South Africa improved their metrics, despite the challenges that emerged in reliable communication due to the lockdown measures in the country.
The temporary additional spectrum provided by ICASA played an important role for this achievement. However, carriers can improve their service in other two ways: invest in expensive infrastructure, and invest in a network performance maximizer for mobile operators.
Users are not loyal to mobile operators
According to the South Africa Connected Consumer Survey 2016 carried out by Analysys Mason, cheaper deals, poor network coverage, and bad customer service are the main reasons for South African users to change telecom companies. That data shows that even minor players can increase their participation in the South African market with the right strategy, meanwhile, major companies can lose their customer base if they miss the details in the service.
Bargains can attract clients, but they’re just a temporary solution that can damage the image of the company if companies don’t focus on network performance. Sentech tested an uncapped service carried out by its subsidiary MyWireless, and Rain chose the same path ten years later, gaining a lot of clients at the first time, but also damaging its image when the quality of service went down the drain.
In South Africa, uncapped services have a consistent history of failure. The offer is attractive for customers, but companies soon deal with network congestion, the quality of service drops significantly and customers backlash the brand. To improve the mobile experience, South African telecom companies need to look for a network performance maximizer for mobile operators to monitor and identify which changes are necessary to improve the quality of service.
The face-pace growth of mobile telecommunication in South Africa has raised new challenges and problems in one of the most important emerging economies in the world. Users are demanding better services, forcing mobile operators to invest in the improvement of their network performance without raising their prices. The trend will lead to a boost in professional services for telecom companies. Solutions as a network performance maximizer for mobile operators are already available. So they can have the right tools for identifying opportunity areas for improving their mobile network performance.