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Networks consolidate services

THERE is a move globally to consolidate the route to market from all telecommunications companies, and it is no different in the South African context.

The past three years has seen the consolidation of service provision from being independent to being part or wholly owned by the networks.

Reasons for this include the high cost of acquisition, maintenance of service to subscribers, the management of credit, and a need to have a closer relationship with the customers.

Says Rob Reynolds, sales and marketing group executive at MTN: "This does not mean an end to traditional service provision. The remaining service providers have proved to be those that have understood and managed the opportunities well and they continue to be highly valuable partners of ours.

"The primary concern for all players in the cellular marketplace today, is the ever-increasing need to efficiently service their customers and fully understand their needs."

Reynolds says today's marketplace is driven by four main factors:

  • Affordability: The price of entry is a handset, and networks can be accessed for under R50 a month on a contractual basis. That makes it affordable to a broad spectrum of the population, and continued enhancement of tariff plans have further reduced the cost of cellular communications;

  • Competition: This drives prices down and creates more value-added products and services for customers, including extended coverage;

  • Availability: The ability to respond to customer growth areas and the ability to deliver services, products and coverage;

  • Pre-paid growth: Mobile phones are both aspirational and necessary and as the cost of ownership and maintenance of the service is reduced, the growth potential is enormous.

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