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Residential Telkom subscribers 'trigger-happy'
17 July 2002, News

With the licensing of the second network operator (SNO) expected to be complete by year-end, research firm BMI-T has looked into the developments so far and its latest report reveals a wide range of results. One aspect is the end-user survey - and the impact that the SNO will have on residential users. BMI-T classified this segment into two different types: the basic residential user - a person with access to only one fixed line and who spends less than R350 per month on this line only, and the sophisticated residential user - a person who has access to more than two fixed lines, and who spends more than R350 per month on these two lines only.

BMI-T analyst, Dobek Pater, says that basic residential users are generally very dissatisfied with high connection costs (38%), the cost of local calls (25%), national calls (28%) and the monthly rental fees (21%).

"The basic residential users seem to be in two minds about deliverables such as quick fault repair, after-sales service and Telkom meeting promised repair dates - with most not being particularly satisfied or dissatisfied. In general, these users were satisfied with bundling of voice with value-added services (70%), friendly and knowledgeable staff (65%), accounts delivered on time (81%), correct address (90%) and accurate bills (78%).

"When analysing the switching dynamics of the basic residential user groups they clearly indicate very little willingness to switch (72%) when only offered a 5% discount (all else being equal). However, 61% of respondents indicated a willingness to switch within 1-12 months if offered a 15% discount."

BMI-T says however, it is not expecting these users to switch this aggressively when provided with a 15% discount, but it is of the opinion that it provides a good indication that current Telkom subscribers have no real loyalty towards Telkom and are open for convincing by the SNO.

"Although the switching dynamics indicate a clear market opportunity for the SNO, it will be surprising to see any SNO activities within this market for the next five years. If the SNO were to target this market, it should be with a key message of delivery of basics, but provisioning of innovative, reliable service bundles at a competitive price," concludes Pater.

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