[By Duncan McLeod]
The playground battle between Vodacom and Cell C over the latter’s new advertising campaign is a signal of something altogether more interesting than them throwing marketing dirt at each other: competition in SA’s cellphone market is getting brutal as the battle for customers intensifies.
Vodacom and Cell C are at each other’s throats, and not just in television, Web, newspaper and radio advertisements. The two companies are engaged in a full-scale fight over customers’ wallets and everything is pointing to an imminent price war.
Cell C engendered the ire of Vodacom and its advertising agency, Draftfcb, last week when it launched a new campaign, engineered by agency DDB SA, that took direct aim at its bigger rival’s rebranding to the red of its UK parent, Vodafone.
In the first of three cheeky television ads, Cell C “chief experience officer”, the comedian Trevor Noah, takes the mickey out of Vodacom’s new brand image, saying it “takes more than a lick of paint to be SA’s number one network”.
Vodacom, which is reportedly spending R400m on its brand relaunch, is outraged, and has laid a detailed complaint against its rival with the Advertising Standards Authority.
The authority is due to hear the matter this week. The country’s biggest mobile operator has taken issue with various aspects of Cell C’s campaign, including its claim to have the “number one network”.
Cell C followed up its television ad with a full-page campaign in Sunday newspapers headlined in huge type: “Who’s the leader now?” More of this is apparently on the way.
Now Draftfcb has declared war on DDB, effectively accusing its former executive creative director Grant Jacobsen, who had worked on the Vodacom rebranding campaign, of sharing confidential information with Cell C, enabling the operator to launch the disparaging campaign about its rival just days after the brand’s relaunch.
Jacobsen, who left Draftfcb in December to join DDB as executive creative director, has denied the allegations.
It’s shaping up to be one of the most contentious marketing battles ever in SA’s advertising industry. But the real story here is not who can piss the furthest but what it says about competition in the mobile industry.
Vodacom and MTN, though competing with each other for the past 17 years, have always used kid gloves. And their all-important tariffs have never differed markedly. If one of them did cut its prices, the other followed within days.
Now Cell C, which for years lacked the financial muscle to take on the big boys in the industry, wants to pick a fight. It’s built a brand-new mobile broadband network at a cost of billions of rand and it’s out to take market share.
In mobile data it has undercut the prices of MTN and Vodacom by some distance. Its bigger rivals have yet to match the lower tariffs, and evidence — like leaked data that shows Cell C has been the biggest beneficiary of regulations that allow people to switch networks without losing their numbers — suggests that it is taking market share from the big boys.
Cell C CEO Lars Reichelt has styled himself as a David taking on the industry’s two Goliaths. He’s certainly not afraid to pick a fight. But now at least one of the Goliaths appears to be getting seriously irritated by this young punk who insists on throwing stones. When MTN and Vodacom hit back — and they will, with lower prices — Cell C could find itself in for the fight of its life.
The stage is set for a showdown not often seen in SA business. Yes, it’s going to get ugly. But consumers should be left smiling as the battle enters its next phase.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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