A connection for small businesses

Cellphone number portability together with a capitulation by the taxman, who says he will no longer bother with taxing the personal use of business cellphones, makes it more compelling than ever for business owners to move all their staff cellphone contracts into one group package.

Cellphones can now legitimately be offered to employees as a perk. And because a small business with a handful of salespeople can collectively clock up thousands of minutes a month, it makes sense for the business owner to try to negotiate a volume discount. It also makes sense for the cellphone company that, by winning over one small business, it signs up several active individual contracts.

Yet only one South African cellphone company seems to have cottoned on to the potential of small businesses as fertile recruitment ground.
Still only six months old, it is difficult to say if MTN’s Connectivity-4-SME offering for small businesses will work, but it seems to press all the right buttons.

MTN’s senior manager for SME marketing, Natasha Basson, says any registered small business signing up more than one mobile number will get rates discounts, which grow with the number of staff members they sign on. “You can’t dilute a corporate offering and then say to an SME [small or medium enterprise] ‘there you go’ and think they’ll be happy. They have specific needs,” says Basson.

Crucially, the package solves the blank cheque problem faced by any business owner who gives an employee a cellphone. If staff members use up the set number of minutes that the business allocates them a month, they have to buy top-up minutes themselves. The discount still applies to these out-of-bundle minutes, but the fact that the employees have to buy these themselves saves the business the hassle of salary deductions afterwards and makes its cellphone expenses exactly predictable.

Apart from the discounts, upfront sign-up fees are waived and features such as caller ID and itemised billing—normally about R27 a number a month—are free.

To sweeten the deal further, businesses signed up with the package also gain access to MTN Bizassist, a buying club that offers discounts on travel, accommodation and insurance, among other things.

Basson says MTN data packages are “incentivised separately”. A business won’t be able to negotiate an even bigger discount by also throwing data contracts into the pot.

Asked about their offering to small businesses, both Vodacom and Cell C’s public relations departments made vague statements about discounts that can be negotiated by small businesses.

Vodacom official Yolanda Berry said the company used to have a package that allowed a business to open a “parent” account with a number of employee numbers billed to it, but the product was discontinued because of a lack of demand.

The lack of products aimed specifically at small businesses is not unusual for South African corporate service providers. Financial services, telecoms and even raw material suppliers usually have well-developed corporate offerings on the one hand, and a good understanding of the individual consumer on the other. But most seem to struggle with the small business sector, which is heterogeneous and little understood. Often products launched for small businesses are ill-conceived and mistargeted.

Although still unproven, MTN seems to have grasped at least one crucial principle.

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