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Telecel Wins Market Penetration Leadership Award

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Telecel ZimbabweTelecel Zimbabwe has been awarded the 2010 Frost & Sullivan Award for Market Penetration Leadership within the Southern African Development Community.

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The rapid growth in its subscriber base and market share has given it a unique position within the SADC region, where, according to global research organisation Frost & Sullivan, no other operator has been able to change its market position over the last year.

At the end of June last year, Telecel Zimbabwe had 260 000 subscribers. By the end of the first quarter of this year the number of Telecel subscribers had shot up to 1 090 000.

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While in June last year, it was the smallest of the country’s three mobile phone network operators, in terms of subscribers, it is now the country’s second largest. Its market share has increased to 28 percent.

“No other operator in the SADC region has been able to change its market position over the last 12 months,” Frost & Sullivan’s best practice analysis in respect of Telecel Zimbabwe says.

The Frost & Sullivan Market Penetration Leadership Award is presented each year to the company that has demonstrated excellence in capturing the fastest measured rate of change in market share within its industry.

Frost & Sullivan is a respected global research organisation. Its more than 1 800 analysts and consultants monitor more than 300 industries and 250 000 companies.

Key performance drivers for Telecel Zimbabwe cited in the award analysis include the renewed interest in the company of its foreign shareholder, following the adoption of the United States dollar as the country’s major currency in 2009.

This saw Orascom Telecom, which, through Telecel Globe, has a controlling interest in Telecel Zimbabwe, committing both financial and human resources to it.

Improved financial controls and governance structures were put in place. The marketing mix was critically assessed. Best practices in the company’s commercial and technical operations were implemented.

“A new value and business model has allowed Telecel Zimbabwe to provide a firm platform from which it can continue to challenge its competitors,” the award analysis says.

Promotional campaigns were introduced that sought to provide subscribers with “a compelling value proposition under the leitmotif of democratising  telecommunications”.

“Given that poverty levels in Zimbabwe are very high and in the region of 80 percent of Zimbabweans are unemployed, affordability of mobile telecommunications is an important factor in ensuring sustainability of revenues for operators,” the analysis said.

Telecel slashed the price of international calls to a number of countries, including South Africa, the United Kingdom and the United States, to the same price as local calls, enabling people in Zimbabwe to call friends and family in the diaspora at more affordable rates.

Telecel’s Mega Juice promotion was also cited as among the company’s performance drivers.

The first Mega Juice promotion provided Telecel subscribers who purchased a one dollar Mega Juice card with two dollars worth of bonus airtime, effectively slashing the cost of calls to other Telecel subscribers to one third of the normal charge. The current promotion provides one dollar’s worth of bonus airtime.

“Traffic volumes and daily revenue increased by 56 percent as a result of this promotion and also attracted subscribers to the network,” the analysis says.

Extending its distribution network for SIM cards and airtime cards, making use of street vendors, had helped improve Telecel’s visibility.

Telecel had devoted considerable resources to upgrading the capacity of its core network to ensure that subscribers are not inconvenienced by poor network quality.

Upgrades of the core network had been accompanied by geographic expansion of the radio access network with the addition of base stations in key population centres.

The company was also on the verge of introducing 3G, which would allow it to broaden its value added and data service offering.

Frost & Sullivan acknowledged that much of the SADC region suffered from poorly developed infrastructure, which presented mobile phone networks with challenges.

Poor transport infrastructure made it difficult to install and access base stations in remote areas.

Electricity supplies were often erratic, with load shedding common or the electricity grid not extensive enough to cover all areas of the country, necessitating back-up power supplies, which added to operating costs, or use of energy efficient network equipment, such as hybrid base stations that use both solar power and grid electricity.

Other problems that operators in the region faced included a shallow skills base, exacerbated in Zimbabwe’s case by the emigration of many skilled professionals, low levels of disposable income and finance being difficult and expensive to access.

Commenting on the award, a Telecel spokesperson said that, while the rapid growth in Telecel’s subscriber base and significant increase in its market share were already common knowledge in Zimbabwe, it was good to know that it was the leader in terms of market penetration not only in Zimbabwe but in the SADC region.

“The rapid growth in the number of Telecel subscribers is phenomenal by any standards. It is not surprising, therefore, to learn that we are the leader in market penetration not only within the country but within the region.

“We are committed to continuing to offer Zimbabweans mobile phone services that are of a high quality, affordable and easy to access.

“We appreciate this award from Frost & Sullivan and Frost & Sullivan’s research efforts, which are beneficial, we believe, to the many sectors that it embraces within the SADC region.”

Telecel Press Release

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