The great non-port
TELKOM SUBSIDIARY Vodacom this week released subscriber numbers for the December 2006 quarter. Most interesting, perhaps, is the early indication it gave on mobile number portability. Vodacom has long downplayed the effect that number portability would have in the South African market and like second biggest in the SA mar- ket, MTN, it’s spent significant advertising revenue to retain its customers and encourage those of other networks to move to it.
Now Vodacom says the total number of customers joining and leaving its network due to number portability so far is around 20 000 – less than the number of new connections it usually activates in a single day.
It doesn’t – like biggest potential
beneficiary Cell C has recently – profess to have been a net gainer from number portability. But Vodacom said it had gained twice as many contract customers as it had lost.
Although Vodacom lost more prepaid subscribers than it gained through number portability, this end of the market is more fickle and accounts for the highest churn anyway ( it’s immaterial to most pre- paid subscribers whether they keep their number or not). Interestingly though, even pre- paid churn was down on the previous quarter.
Stock brokerage Imara SP Reid said it was encouraged by Vodacom’s reported growth of 7,8% to 21,8m in the SA base in the face of number portability, competition and high penetration, which it had thought would undercut Vodacom’s growth going forward. The fact that it gained more contract subscribers than it lost so far “ indicated that the effects of number portability won’t be as downbeat as we had envisaged,” Steve Meintjes wrote in a research note.
The upbeat outlook for Vodacom in SA doesn’t change Imara’s view on its parent, however, and it maintained that shareholders should still switch out of Telkom shares.
Naturally, the smaller players in the local telecoms space don’t share Vodacom’s view of number portability. Cell C said in a recent statement that it – including Virgin Mobile – had captured 40% of all ports and was a net gainer having lost only 13% of all ports.
While Cell C conceded that the numbers so far were still small, it said it had never expected a “ big bang” effect and was pleased with the way the process was gaining momentum.
DataPro’s VoxTelecom also said recently the initially small numbers were not surprising, as people would wait for their current contracts to expire before deciding whether to move or renew. And even though seeming a non- event, number portability would in the long run force the networks and service providers to pay more attention to the needs of customers, it said.