CONSUMERS believed Vodacom offered the least favourable roll-over terms.     Bloomberg
CONSUMERS believed Vodacom offered the least favourable roll-over terms. Bloomberg

Vodacom failed to impress its customers

By Kabelo Khumalo Time of article published Apr 29, 2019

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JOHANNESBURG – Data from multinational research firm BrandsEye painted a dire picture for Vodacom and its competitors which, it said, failed to impress their customers with their data pricing.

BrandsEye on Friday released its latest SA Telcos Sentiment Index, which analysed about 500 000 social media posts about telco providers.

The firm said Vodacom’s implementation of the data regulations introduced by the Independent Communications Authority of South Africa (Icasa) damaged its reputation and drove consumers to quit the network.

BrandsEye SA chief executive Nic Ray said consumers accused Vodacom of finding loopholes to avoid complying with the spirit of the new regulations. “Consumers also noted that in some instances, these roll-over fees actually exceeded the cost of a bundle, therefore deterring consumers from benefiting from the regulations. Press coverage of Vodacom being the only provider charging for data roll-over and transfer also drove negative sentiment,” Ray said.

“In response to the public backlash on social media, Vodacom backtracked and announced it would reduce out-of-bundle charges by up to 70 percent. But this news was met with further negativity after the provider noted that the discounts would be accompanied by increases on some tariffs.”

BrandsEye made international headlines when it found that the social media conversations they had mined pointed towards a victory for the campaign for the UK to leave the EU and Donald Trump winning the US presidential election.

Icasa’s regulations meant that there would be no automatic rolling over to out-of-bundle data charges when bundles ran out. Users would have to pro-actively opt in to out-of-bundle data charges in order to stay connected, even if airtime was available or if they were on a contract.

BrandsEye said the regulations prompted negative comparisons, as consumers believed Vodacom offered the least favourable roll-over terms.

BrandsEye research came days after the Competition Commission hit out at MTN and Vodacom, accusing them of charging higher data prices in South Africa than they do in the other territories in which they do business.

The commission called on operators to slash their prices immediately.

Ofentse Dazela, a director of pricing research at Africa Analysis, said delays in the allocation of high demand spectrum also meant that mobile network operators (MNOs) continue to build sites in close proximity to ensure that user experience is not compromised.

“This exercise has thus far resulted in annual growth of capital expenditure for MNOs, and to this point the relatively higher data costs charged by MTN and Vodacom in the local market have largely funded their network expansion programmes,” Dazela said.

“By implication, the recommendations could trigger a new era of slow investment in the local telecoms market, as well the possibility of accelerated job losses in the sector.”

BrandsEye research also found that, across the sector, customer service made up 47.2percent of complaints. These were largely about turnaround time, while 44.4percent of complaints on social media went unanswered by providers.

In its response to the research, Vodacom said it “responded decisively and speedily to the data rollover matter. In addition to fully complying with Icasa’s End User and Subscriber Charter, Vodacom announced a reduction in out-of-bundle tariffs by up to 70percent. As a result, we did not experience an increase in porting requests for the period under review.

“We are particularly encouraged to see that the significant investment we have made in our Social Media Command Centre continues to pay dividends for customers. For example, the report shows Vodacom responds 2.5 times faster to complaints on Twitter than the industry average.

“The report also recognises that Vodacom’s special offers significantly outperform all its competitors, with a special mention of its Summer Gigs promotion.”


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