South African consumers dislike the telecoms industry the most compared to how they feel about the banking, insurance and food retail industries despite the industry’s work to augment its network capacity with additional fibre and wireless deployments last year.
It seems that service providers still have a way to go in meeting consumer expectations, according to the latest South African Telecommunications Sentiment Index, conducted by DataEQ in partnership with Deloitte Africa. The industry ranked last in terms of consumer sentiment for the second consecutive year.
The net sentiment for retail was 4.1%, for insurance 1.4%, for banking -7.5% and a whopping -31.1% for telecommunications.
Load shedding contributes to dislike of telecoms industry
Granted, it was not an easy year for the industry. “Amid increasing data traffic, the industry battled for additional broadband spectrum, while load shedding also had a devastating impact, increasing operational costs when margins were already under immense pressure,” says Gill Hofmeyr, Africa TMT industry leader at Deloitte.
Load shedding heightened network stress across the industry and data from EskomSePush confirms that load shedding was implemented on a total of 45 days in 2021. Unusual volumes of network complaints were noted on more than half of these days.
MTN ranked the highest
Almost two million social media posts were tracked throughout the year to determine how customers feel about Cell C, MTN, rain, Telkom and Vodacom. The Index saw minimal movement in rankings from the previous year.
While public Net Sentiment for most providers, except Cell C, followed an upward trend over the year, MTN and Telkom saw the most consistent progress, with rain following a similar upward path from February to October. However, Net Sentiment dropped over the festive period similar to MTN and Vodacom.
Only the middle positions changed when ranking the network providers by their public Net Sentiment score for 2021:
- MTN extended its lead with the largest year-on-year Net Sentiment improvement of 14.9 percentage points
- Telkom showed the biggest improvement in reputational and operational sentiment of 13.6 percentage points to share the second place with Vodacom that saw an increase of 2.8 percentage points
- Cell C was the only service provider whose Net Sentiment worsened in 2021 to 10.3 percentage points, causing it to lose one spot in the ranking
- rain’s increase of 2.6 percentage points was not enough to see a ranking shift.
MTN also had an increase in reputational Net Sentiment, which was tied to an increase in positive campaign conversation compared to 2020. Influencers were key to the success of MTN’s campaigns, with 41.7% of its positive reputational conversation authored by or engaged with influencers who explicitly noted they were contracted for the promotion.
Telkom recorded the largest year-on-year improvement in reputational Net Sentiment thanks to a decrease in reputational negativity and an increase in positive reputational sentiment. This is good news as it faced reputational backlash in 2020 for its decision to retrench 3,000 employees, while its network reliability was also questioned and drew negative comparisons to Eskom.
Cell C’s operational Net Sentiment deteriorated the most, with five major spikes in operational complaints throughout the year, with all related to network downtime.
MTN and rain also experienced increased negativity around their networks, with network quality complaints doubling in their contribution to both operators’ negative operational conversation. Vodacom also had multiple flares in operational complaints, largely linked to the competitor’s ShakeOff puzzles, with users claiming they were impossible to complete, as well as reports of network downtime.
Telecom industry prices
Cell C, MTN and Vodacom all decreased the price of their 1GB, 30-day data bundle to R85 during 2021, while Telkom reduced its equivalent offering to R79. On average, 9.2% of the industry’s operational complaints were related to pricing, while one in five mentions of positive operational feedback were tied to pricing.
The biggest industry driver of pricing operational complaints was affordability, particularly regarding data. Despite their improvement in pricing sentiment, Vodacom had a relatively high proportion of affordability complaints.
In line with the previous index findings, negative conversation about data prices often co-occurred with network complaints, suggesting the provider’s data prices upped customers’ network expectations.
rain’s high proportion of complaints about fees or charges often came from customers struggling with network issues, who noted it was unfair to pay for a service they had not received. Users also complained about being billed more than what they signed up for after cancellation, suggesting rain’s pricing structure and cancellation policies were unclear to some.
Telkom’s personalised Mo’Nice data offers continued to drive above-average negativity, with some users reporting being unable to use their Mo’Nice data purchases. However, most complaints dealt with the price of the offers. It appeared users initially received affordable offers, with prices increasing in line with use.
Nic Ray, DataEQ CEO, says much of the progress relied on telecoms industry’s reputational efforts.
“Notwithstanding some successful brand and influencer campaigns, customer experience remained a major shortcoming across the industry, with consumer sentiment for this aspect worsening year on year.”
Considering that their efforts in 2021 did not translate into an improved customer experience when compared to 2020, this remains a key area for differentiation, he says.
This time the Index also included a dedicated analysis of their adherence to the Financial Sector Conduct Authority’s (FSCA) Treating Customers Fairly (TCF) regulatory framework regarding their financial services offerings, as network providers continue to offer financial services.
Hofmeyr points out that a poor response to customer conversation in this regard therefore not only impacts a brand reputationally but could pose a market conduct risk as well.
“Beyond these rising regulatory pressures, the results indicate that telecommunications companies lag behind the broader financial services sector in terms of consumer sentiment.”