SA Telecoms Index: Churn Analysis 

To focus on the social media interactions that matter, DataEQ’s Crowd identifies the most valuable customer interactions and categorises them using four priority tags: risk, purchase, cancel and service.

Purchase mentions are from prospective customers who want to sign up to a network provider’s product or service, whereas cancel mentions are from customers looking to leave their current network provider.

Cancellation risk outweighed purchase interest across the industry

According to results of the latest South African Telecommunications Sentiment Index, the percentage of authors at risk of cancellation was 3.0% versus those expressing purchase interest at 2.0%. Out of the five operators analysed, Telkom recorded the highest potential net churn. While mobile subscribers grew by 25.9% year-on-year, its fixed-line subscriber base continued to decline.

rain, which saw its subscriber base grow from roughly 100 000 to approximately 800 000 in the span of a year, recorded both the highest proportion of purchase and cancel conversation. This suggests the newcomer could see its growth slow down or even reverse if it fails to address the issues driving its high cancellation risk, namely poor customer service and network quality.

Notably, the country’s two largest providers – MTN and Vodacom – recorded the lowest levels of both purchase interest and cancellation risk proportionally. With regards to purchase interest, this is mostly due to people seeking more affordable deals at the smaller providers. However, the relatively low percentage of conversation around cancelation suggests that MTN and Vodacom are doing well in terms of customer retention, in comparison to the smaller telcos.

Telcos failed to capitalise on mentions presenting an acquisition opportunity

Counterintuitively, mentions expressing purchase interest saw the lowest response rate out of all categories of mentions warranting a response, with two thirds of these going unanswered.

Jacques Compaan, Senior Manager within the Enterprise Technology and Performance portfolio at Deloitte – DataEQ’s partner in conducting the Index – says that this identifies a missed opportunity for telco customer acquisitions. “With increasingly more South African consumers turning to social media for customer service and inquiries, telcos need to ensure that purchase opportunities receive the attention required to see successful customer conversion.”