South African telecommunications service providers need to rethink their approach to the small and medium sized enterprise (SME) market or risk disintermediation in the future.
That's according to Tim Walter, GM: product & marketing at Nashua Mobile, who says that a number of changes in the legislative, regulatory and competitive landscapes demand that service providers strive to add more value to their business-to-business (B2B) customers and simplify the telecommunications experience for them.
"Today, most service providers focus only on selling raw connectivity. In a market where operators are looking to directly own their customers bases and where new competitors, such as banks, are leveraging their brands into telecommunications, that is no longer enough," says Walter. "B2B customers are looking for a better customer experience from an industry that has been notoriously bad at customer service."
Walter says the South African telecommunications market is going through some major shifts, partly due to new legislation such as the Electronic Communications Act that have swept away many of the regulations and laws that have protected incumbent operators in the past.
There is now increasingly vigorous competition in markets such as national backhaul links and international cables where there was little or none before. For example, players like Dark Fibre Africa are ringing South African cities with fibre-optic cable, others are rolling out fixed wireless solutions such as WiMax and the arrival of Seacom has started to bring international bandwidth prices down.
Fiercer competition is turning connectivity into a commodity and margins are becoming thinner, meaning that it is harder to compete on price. Government and the regulator are also pressurising operators to bring their tariffs down, as was made clear in the Department of Communications' recent interventions aimed at bringing mobile interconnect fees down.
“To remain competitive in this environment, service providers need to provide individually tailored answers to the issues and queries of business customers of all sizes,” says Walter.
“As competition heats up, choice and complexity grows, and businesses become more hungry for advice and consulting services."
SMEs are looking to service providers to help them find solutions that are perfect for their business needs, and have no interest with being bombarded with technical jargon.
In addition, they are looking for one-stop shopping for a wide range of services such as fixed voice, mobile and Internet access as well as hosted solutions and messaging.