”A lot more needs to be done to make [cellphone] calls affordable,” Arthur Goldstuck, managing director of World Wide Worx (WWW) said on Friday, regarding the recent findings of the Mobility 2006 research project on the impact of mobile and wireless technology on the South African consumer.
”The biggest proportion, 45% of South African [cellphone] users, have very low income and education levels and they are still spending money on calls,” Goldstuck said.
And just because they still make calls, doesn’t mean it’s affordable, he said; it just means that they have no other choice.
The research found that the ”Grassroots” segment, which mostly comprises lower-income individuals, accounted for 45% of users and about a quarter of overall spending. These people generally do not access the internet from their phones, and are also the least likely to be on contract or to change their cellphone network.
Goldstuck said the research, conducted by WWW with the support of Virgin Mobile, FNB and Verizon Business, is important because there is ”very little understanding of who uses cellphones and in what way, and how they can be better served”.
The research findings were presented at the Mobility 2006 Conference in Johannesburg on Thursday.
Paris Mashille, chairperson of the Independent Communications Authority of South Africa (Icasa), spoke at the conference, saying ”the indigent population has to be catered for … we must address those areas that are not attractive to the market”.
Goldstuck, however, told the Mail & Guardian Online: ”Icasa makes a lot of noise, but doesn’t do much [to lower prices].”
This consumer-research project formed part of a three-phased survey carried out in July and August this year. Phase one and two researched the impact of mobile technology on the corporate sector and on small, medium and micro enterprises (SMEs) respectively.
Using a nationally representative response base of 1 152 people, the consumer-research survey was able to identify six market segments that explain the cellphone-usage habits of average South Africans.
Named ”Grassroots”, ”Lizards”, ”Playas”, ”Magpies”, ”Sophisticats” and ”Elephants”, the six segments each ”have an image and a persona,” according to Goldstuck. ”These names are concepts that characterise the segments; if you talk about it in statistical terms it doesn’t give you a picture,” he said.
The research found that, like the ”Grassroots”, the ”Lizards” were also more likely to use the pre-paid option as opposed to contracts. This group, however, known for their brand disloyalty, changed networks regularly and accounted for 8% of the market and just 4% of overall spending.
”Developing a degree of loyalty in a very promiscuous market” is important, Sajeed Sacranie, CEO of Virgin Mobile South Africa, said at Thursday’s conference.
The third and fourth segments, the ”Playas” and ”Magpies” are similar in their age demographics and affiliations towards technology.
The ”Playas”, generally young adults with not a lot of money to spend, still account for almost 20% of overall market spending. More inclined to downloads and data usage, they are ”the future big spenders and they need to be nurtured”, Peter Searll, CEO of Dashboard Research told the conference.
The ”Magpies”, the youngest and smallest of the segments, aged from about 16 to 20, accounted for just 3% of both users and overall spending. But according to Goldstuck, they are the ”most interesting group” given their tendencies towards ”bling”.
”They are a small niche but [a] sophisticated, techy market,” Searll said.
The last two segments, the ”Sophisticats” and the ”Elephants” are, as their names suggest, the bigger more sophisticated players in the world of mobile usage. ”Sophisticats” account for 11% of users and 16% of overall spending, preferring data content and internet access, as well as cellphone banking.
The ”Elephants”, comprising just 9% of users are, at 33% overall market spending, the highest contributing group. Spending an average of R729 a month, 99% of them are contract users. However, unlike the ”Sophisticats”, this group prefers SMS and voice calls to data content and subscriptions.
Goldstuck said this could be due to disinterest on their part or a lack of time to download content. Alternatively, the older age group that many ”Elephants” belong to could also be keeping them away from more technologically complicated applications.
”Features get more advanced, but the challenge is for more user-friendly phones,” Goldstuck said. ”And, incidentally, this applies to the ‘Grassroots’ as well.”