[By Candice Jones]
SA’s telecommunications industry has assembled on the battlefield with two players, one new, Telkom’s mobile business 8ta, and one reinvigorated, Cell C, getting ready to take on the giants of industry.
Some smaller players are gathering on the flanks and others may yet make an entrance.
But over the next few years expect to see casualties.
One of the casualties could be Neotel, once billed as SA’s second national operator. The company has been slogging away at getting infrastructure in the ground and pushing its tendrils into the corporate voice and data markets.
South Africans once regarded Neotel as having the real potential to offer a competitive alternative to Telkom in residential services. But over the last little while that likelihood has all but vanished.
Neotel appears almost shell-shocked, seemingly wandering aimlessly back and forth between strategies. Its commitment to the consumer space is so fickle it has changed its plans three times in as many months.
In August, the company released an uninspired prepaid retail offering that left many industry commentators baffled by its decision to release a product at all. The initial product was available only in R100 denominations and its call rates were not particularly attractive.
Neotel’s decision made more sense a few weeks later when it announced it was not really interested in the consumer market.
Then, at the beginning of October, it changed its tune again, introducing a high-speed data service for R99/month that includes 500MB of data and 500 SMSes.
It also did away with differences in tariffs between prepaid and post-paid products and launched prepaid offerings for both voice and data services.
Free on-network (Neotel-to-Neotel) calls came into effect between 6pm and 7am.
But it remains to be seen whether any of this will lure new customers, especially with a reinvigorated Cell C playing on its turf. Telkom’s mobile offering, 8ta, has also received mostly positive feedback so far from consumers.
MTN and Vodacom will react quickly if they start losing market share to any of these upstarts.
Neotel does have a solid customer base in the enterprise market, and has chipped away market share from Telkom. But its on-again, off-again consumer approach is not going to endear the company to retail consumers.
What the company needs is direction. It needs to choose which market it wants to play in and focus all its energies on being excellent at that.
The alternative is one where it becomes a casualty on what will be a bloody battleground.
- Candice Jones is deputy editor of TechCentral
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