RSS

Category Archives: Business

Lessons a virus taught us

The statistics are staggering. Just about 60 million as at the time of my last check. That is the number of people infected by the Coronavirus across the globe. A total of over 1.4m lives have been claimed since it struck. The only positive spin on it is that in excess of 42m people have recovered. Additionally, of all the active cases on record, 99% have been recorded as mild.

However, one striking truth is that this has not just been a normal pandemic (if there is such a thing). It is novel and has dealt a global blow that cannot be ignored.

For the first time in our lives (at least most of us), the world literally came to a standstill. Planes were tucked away in the hangars and could not hit the sky any more. Factories were shut. Traffic was absent except for emergency or security vehicles at most. The world had been forced into silent submission.

This time, no one was worried about the mounting billions of dollars lost in economic activity as businesses ground to a halt. Lives had to be preserved as a priority. The crisis was compounded by the fact that no one knew how to handle the pandemic and there was no vaccine or defined treatment regime to counter this global assault.

Even in crisis however, there are threads of positives that can be knit together through collective reflection. This novel virus has forced us to come to that point and do just that.

I have done my own introspection and a few insights come top of my mind.

Stop, pause and reflect

Our lives today are hectic and fast paced. We are in a rat race most of our lives, chasing the next pay, meal and sorting out bills to keep our livelihoods on track.

We thus have very little time to actually live, love and thrive. No time to see the beauty of those in our lives or the splendour that nature boasts of as she displays her fauna and flora. No consciousness to ponder the pricelessness of life or the inevitability of death each passing day. Very little time to take in all that is in our lives that we have either taken for granted or simply ignored. No chance to appreciate the freedom we enjoy, to go about our lives with ease and in peace.

The little virus has forced us to step on the brakes. To take it easy, to look around and take stock. Where are we with our lives? What things mean the most to us? Who are we spending time with, is it those that matter? How is our life progressing and in which direction? Before this pandemic, few of us deliberately paused to take all this in. This certainly changed. Whether it lasted or will last is another matter.

Mother Nature mourns

It is abundantly clear that we have been doing great harm to the environment. The pollution, degradation, deforestation and unchecked development. Climate change has become an active issue to consider before we run down this earth.

When the virus struck, all else did not matter. We had to stop. Activity came to a halt and the impact of this pause showed.

The global skies cleared. The air was fresher. Rivers and streams were clearer. Experts that track the environment and its state have highlighted how Mother Nature has shown positive signs of revival during the period of global inactivity. With grounded flights and zero traffic, air pollution receded and with industrial activity muted, the flow of waste was curtailed. Wildlife breathed some clean air again.

Inevitably though, restrictions have been eased in many countries and as swiftly as one can imagine, Mother Nature will be under attack. Back at one. Even with cases on the rise again in some parts of the world, there is a general reluctance to impose total lockdowns. The economy took a massive battering and the appetite to slow down again is low, with the implications well known.

What cannot be disputed though is that we needed this moment. To see that it is possible to do something positive about the damage we have successfully inflicted on the environment.

If the brief experience was and is not a strong reprimand and reminder of the damage we have done and continue to do to our environment, then we are doomed.

Leadership is all about competence

One thing that holds true is that in leadership, unique situations will arise and there won’t always be a standard template or manual to guide.

The pandemic era galvanised different people from varying fields to get together and face a common enemy. It brought to the fore a known fact oft ignored, that solutions are not reposed in an individual but more in collaboration.

During this unprecedented time, we have observed that it is ok to be vulnerable and reach out to others with the expertise or for varying views to find solutions. Presidents, executives and those in pole positions paid sharp attention to their technical experts for the most effective and pragmatic approaches. To save lives (and economies).

Ofcourse, there were and have also been examples of leadership arrogance or the egotistical appetite to be the alpha and omega as far as solutions go. Those wise enough to understand what makes a leader put together the best brains to craft risk based responses that delivered tangible outcomes.

Even the corporate world was not spared as the C-suite grappled with the best response, navigating the delicate path of preserving performance and securing their employees’ well-being. Issues such as remote working, team productivity, technology, medical support and case management for infected employees, all sprang up as top Boardroom agenda items.

Inevitably, this scenario was a perfect recipe for conflicted leadership postures. Traditional paradigms were challenged and exposed the mindset of most leaders, as they questioned whether teams can actually deliver remotely or have to be in a physical location.

In the end, the most dynamic, forward looking, perceptive and wise leaders exhibited commendable competence and authenticity in handling the new workplace dynamics.

Tough situations test and refine leadership. This phase has been no different. It has demanded a different dimension of leadership and he (she) who has ears and eyes to hear and see has heard and seen.

An unpredictable future, predictable actions

The human capacity and capability to predict the future is finite. At the start of 2020, not a single strategic plan may have prepared for disruption caused by a pandemic. It just was not on the radar.

No person, leader or organisation can prepare for all scenarios. Such unforeseen events will arise every so often. Who knows even within the next decade something so significant will pop up again.

Notwithstanding this limitation, an eye on the future triggers some preparation of sorts. Right now, several strategic considerations will have to be made at all levels and across different organisations. What will future jobs look like? What skills will be marketable and needed for the future economy? How will technology shape organisations, disciplines, careers and how business is conducted? With Covid-19, even the church was not spared as activities went virtual and recovery remains slow despite restrictions being eased.

This calls for a different view of plans, to prepare for unchartered waters and an unfamiliar future. Global economies, international trade, industry dynamics, human interaction, organisational structures, the type of employees and nature of services (and products) all point to significant changes.

At individual, corporate and government level, scenario planning now takes precedence. Risk management has evolved and must continue to do so. Things will never be the same and the world has to be ready for an unfamiliar future. Organisations that fail to adapt their strategic blueprint to this reality do so at their own peril.

Research and science, a big thing

It has been a busy time in the laboratories and in the pharmaceutical world. Not only because of the urgent need to develop a vaccine but also the likely ulterior motives of bragging rights for the powers that be.

We have read and seen how many countries have flaunted their progress on vaccines and treatments alike. From the US of A, Russia, China to Madagascar.

Away from the brag race though is a relevant challenge for all countries that are thinking ahead. It is time to invest in science, in research that seeks to conceive and churn out solutions for challenges faced at a community, country, continental and global level.

Zambia for instance contends with the disease burden caused by malaria, HIV-AIDS, Tuberculosis, Cholera or weather induced conditions such as drought or natural attacks driven by Army worms and locusts. How much time, effort and human resource has been or is being invested in scientific research and skills to find solutions? Your guess is as good as mine.

The Covid-19 crisis remains a blessing in disguise in this context. It has shown that there is opportunity and the moral obligation for us to pay attention to the important areas of medicine, science and research that will help us confront our real and present challenges as a people. With the global ligaments that hold us together, what may be local solutions may well eventually end up being global solutions.

Play global but strong local

Long term planning is critical. It shapes the present focus on aspects that will yield results for the next generations.

What can 15 million people do for an economy? A lot. From creating a pool of labour, consumers of a nation’s products and services, skills for various sectors that drive economic activity and all the things necessary for GDP growth. The key ofcourse is that the bulk of such a population has to be productive.

And why is that important? During the height of the Covid-19 onslaught, most countries went into total lockdown. Then we had countries like Zambia which treaded pragmatically, opting for partial lockdown. What was observed was the vulnerability of economies when markets are shut. Supply chain disruptions, an export market pause and even human traffic flow ceasing. Various sectors were impacted.

In a global village, this was bound to happen. However, it also demonstrates the need to craft and implement plans that leverage the population numbers as they are. To create an alternative market that also contributes to sustainable economic activity. How can the bulk of a country’s population like ours be propped up to productive levels that generate income which in turn filters into the local economy?

How can our tourism sector have a fair share of its tourist and revenue numbers driven by locals? How can our non-traditional products be consumed within the country? How can in-country trade be significant enough to keep the economic wheels turning even during global downturns, through small and medium enterprises?

The point is yes a shock like the Corona attack will indeed bring things to a standstill. But there must also be a way to keep activity going through a country’s population to cushion the shock and also to serve as a catalyst for an economic reboot as things slowly circle back to normal in post-crisis times.

You are on your own

If there is a profound lesson from this episode, it may well be the realisation that each stands with their own when it matters.

During this crisis, all continents and their countries leaned towards their own. As far as priorities were concerned, there was no immediate attention paid to what other countries needed. Third world or developing nations had to look elsewhere or patiently wait in the wings to get back on the radar of their cooperating partners.

Africa as a continent has for a lifetime been dependent on developed nations for aid, bailouts and solutions to her peculiar challenges. This time around though, her partners had their own battles to fight and thus were more focused on what concerned them in the immediate. Understandably so.

At face value, this would seem like a blow and train smash. But not so in my view. It merely reinforces what we have known all along. That we must take charge of our destiny and own the responsibility to create a better future for ourselves as a country and a continent. We will get a helping hand at some point but that should not be what determines and dictates our success.

We must co-exist, co-create our future and cooperate at a more strategically engaged level for homegrown solutions. When a crisis or need arises impacting the continent, the first point of call for collaboration and crafting solutions, must be Africa coming together to deal with Africa.

This currently seems idealistic. The truth is that it is but it is realistic idealism. Africa must come first and Africa must carve her own path. This may not be realised in the near term but it certainly must be initiated immediately. It does not need to come to pass today but let the foundation be laid for the future generations to build on and make this a reality.

We owe it ourselves as a people, country and continent. Failure to see and accept this urgent need to reverse the trend sets us firmly on the path of mediocrity, inferiority and perpetual underachievement.

Covid-19 has indeed been a wake up call for our world. Something most have not experienced in their lifetime. It has opened us up to many aspects we have not interrogated actively in our day to day life, which is a great positive.

But if there is one lesson that surpasses them all, it is the fact that every day we have above the ground is a blessing. We must make the most of it.

Read the rest of this entry »

A national airline, do we need it?

16 Apr

The rebirth of a national airline has yet again ignited discussion in Zambia. The most recent comes in the wake of President Sata’s appeal on his visit to China.

Setting up of a national flag carrier seems to be an unmistakeable motivation. The domestic and international airspace has not seen the Zambian eagle soar since the demise of Zambia Airways in 1995.

All fillers that have attempted to seal this gap have either flown their way into oblivion or headed to the hangars for other operational reasons.

With the current stated need for an airline, it leads us to a point where we assess this appeal. Do we need an airline? What are the cost implications or perhaps the overriding benefits?

To appreciate part of this need, we perhaps must be certain what running an airline involves. This should provide an insight into whether Zambia is on track to venture into this business in the first place.

Lessons from yesterday

Zambia Airways was the nation’s pride. It covered major routes including long haul flights to New York, London, Frankfurt, Rome and Amsterdam among other international destinations.

The acquisition of a DC-10 called Nkwazi represented the height of its identity in 1984. This was the birth of the widebody era in Zambia’s aviation industry.

However, 1992 dawned with its challenges culminating in the airline’s liquidation three years later. The new government then stipulated that the airline be responsible for its debt and sustain its operating expenses through its generated revenue.

With the harsh economic environment then, this measure only worked to speed up the airline’s flight into liquidation.

The suggested business model entailed that Government financed Zambia Airways to a very large extent. With the action for the flag carrier to fend for itself, it’s future could not be guaranteed without Treasury support.

An action too drastic?

The economic climate in the early 90’s was daunting and the new Government seemingly had little leeway to avert the rough tides.

This meant beneficiaries such as Zambia Airways were also dealt a stinging blow. The history from this point on is well documented.

However, what is of interest is what other options the Government then could have explored.

It is pointless to mourn what could have been but extremely useful for us to pick lessons from what was. Especially now when there is increased impetus for a national airline.

A successful business model

Kenya Airways offers a classic case study of an alternative option and operational model.

The airline was wholly owned by the Kenyan government until April 1995. The difference though when decision time beckoned was the route taken by the Government.

In 1996, Kenya Airways was privatised becoming the first African flag carrier to do so successfully. The airline is currently run under a Public Private Partnership.

The Kenyan government owns 29.8% while KLM has a 26.73% stake in the airline. The rest represents private owners’ shareholding.

In terms of success, this partnership undoubtedly salvaged the kenyan airline. The milestones scored attest to this fact.

As of January 2013, Kenya Airways was reported to be one of the leading continental airlines, ranking as the 4th in Africa based on seat capacity. The first three are South African Airways (SAA), Ethiopian Airlines and EgyptAir.

In addition, the airline’s shares are traded on the Nairobi Stock Exchange, the Dar-es-Salaam Stock Exchange and the Uganda Securities Exchange.

With a workforce in excess of 4,000, a fleet size of about 40 and flying to over 50 destinations across the world, the commercial success of the airline is hard to ignore. Needless to say, it has not been as easy to achieve as the milestones may suggest.

Considerations for Zambia’s case

There must be plausible reasons for Kenya to have settled for the business model above.

Regardless of the operational and financial challenges that may have been encountered over the years, this seems the best option for a national airline. More so in the context of the developing world.

The airline business is not inexpensive. The associated costs make it necessary to consider the full implications before embarking on any colossal investments of public resources.

One only needs to appreciate the costs that are incurred in running an airline. The cost of an aircraft alone runs into millions of dollars and to build a competitive fleet, inevitably billions need to be invested.

Coupled with this, fuel and maintenance costs, airport and regulatory fees all add to the cost line of the business. Of course not forgetting the recruitment and remuneration of qualified personnel such as pilots and a competent management team to steer the business to success.

To get the flag carrier airborne and sustain its operations, a Government financed airline should not at any point be an option for Zambia.

The drain on public resources and the resultant hit on the national treasury cannot be overstated.

Zambia ought to tread carefully on this path before delving into it based on the old model that may have been deemed appropriate in the 90s.

What about competition?

The aviation landscape has evolved substantially since the last Zambia Airways aircraft hit the skies.

One key area of this transformation is in terms of competition. Zambia today has a host of airlines that fly into and out of Zambia. Major airlines such as British Airways, Emirates, SAA, Ethiopian Airlines and Kenya Airways all cover the major routes out of Zambia.

The key question then becomes whether or how Zambia is positioned to face this competition and endure the long haul.

To attain viability and sustained profitability, huge investments and other fundamental adjustments ought to be made. This is in order to support a venture that has been largely comatose for decades.

The danger of plunging into this pool without thorough consideration of such factors lies in the actions Government may end up exploring.

It is a potent possibility that Government could introduce measures to protect the airline against such stiff competition. Or provide further incentives that would ultimately be subsidies and impact the country’s financial performance.

This too may be testing on the confidence of wooing investment if there is any hint of state intervention. Every country enjoys sovereignty and its paramount obligation is the welfare of its people’s interests.

However, it is cardinal as well that perception is well managed to ensure the right investment filters through into the local economy. It is this delicate balance that Zambia must pay attention to in order to avert any extremist actions in pursuit of a flag carrier.

What then should we be pursuing?

Undoubtedly, Zambia currently needs pragmatism over pride as far as this issue goes.

We are a developing nation. We still have hordes of our population living in poverty. We still have people that are dying without access to basic health facilities. Not to mention, armies of our people that need an education.

This being the case, our immediate areas of concern will be whether this investment is a priority especially if Government is to bankroll the revival of the airline. If this be the case, should we not be looking at delivery of social services, equipping our citizens with requisite skills and infrastructure development?

Coupled with this, as far as the airline goes, perhaps other avenues ought to be assessed. For instance, we have a beautiful country well endowed with resources. Should we not be engaging in strategic alliances that will transform our tourism sector?

We have major airlines coming into Zambia, how do we leverage these to promote our tourism? How do we invest in easy access to our tourist sites? How can we work to upgrade infrastructure and facilities such as airports to support such aspirations?

It remains a fact too that being landlocked can work for us. Can we aspire to be a logistical hub in the region, a rich and smooth transitory route? Can we turn our eye to agriculture to become the undisputed supplier of food within and outside the region?

There is a lot of work to be done and most of it appears more of a priority to me than pouring billions of dollars into setting up an airline.

The final piece

Zambia has a lot working for her currently. The help she needs from all of us is the will to drive change and progress. Political will is critical as is citizen awareness of any endeavours taken with long term implications.

Therefore, one of the first things we ought to be seeing is an integrated development roadmap. We have recently been informed of grand plans to transform the railway system in the country. This is progressive but expensive too.

It follows then that the full scale of setting up a national airline be analysed with the railway investment in totality among other things. This would offer a snapshot of how much public resources are to be invested in these colossal projects.

Furthermore, the fact that we are a relatively poor nation rising out of the poverty abyss entails that every penny that will affect the next generation be accounted for.

We need to know how much this airline plan will cost the nation. Is it to be financed out of debt and if so, how much, at what cost?

From this perspective, it is clear to me that if the airline is to be financed through state coffers, it is not a worthy pursuit at this stage of our development. The best option to explore may well be a venture riding on best practice from Kenya. Are we able to solicit adequate interest and investment through a Public Private Partnership?

Our energies and intentions must be directed toward such avenues if the nation is to derive value.

To achieve this, we must agree to objectively review what we are striving for.

And certainly, pragmatism must prevail over sentimental considerations disguised as national pride.

1 Comment

Posted by Katongo Mupunda on April 16, 2013 in Business, Economic, Opinion

10 likely reasons why your customer service is not improving.

09 Jan

Customer service remains a strategically relevant success factor for any organisation. Its contribution to profitability or organisational success through retention and customer loyalty is oft weakly assessed.

Organisations usually design and implement service initiatives to improve delivery and achieve consistent customer satisfaction. However, we also encounter challenges when service does not improve in tandem or as expected.

Where does the breakdown happen? Below are ten factors to consider when reviewing service performance. There will be more factors peculiar to an organisation and these can be explored as each situation demands.

1. Non-existent or casual recruitment criteria

The standards we expect in service delivery are explicit. The radiance of the frontline and effectiveness of systems as well as processes are equally well known.

The reality though shows there is significant inattention to how service or frontline staff are recruited. It is evident in several cases across Zambian organisations that some staff are not a perfect fit for customer facing roles.

It appears agonising for them to interact with customers or apply basics such as smiling, being warm and welcoming or readily supportive to deal with queries and requests.

Therefore, organisations must be clear on the profile and attributes of their service staff. This must form part of their recruitment process with consideration for role plays or case presentations among others during the scrutiny of candidates.

This may potentially highlight attitude, service mindset and exposure, possible pointers on candidate suitability.

2. Broken promises and undelivered commitments

I recall one conversation with a customer. She had called in to log a query. It so happened that it was one that required investigation to ascertain course of action. She understood this and when I indicated that I would call her back, her reaction stunned me. She plainly asked me that “are you sure you will call me?”.

Obviously I was startled by the unexpected reaction and question. But it made me realise how much damage we inflict on service and our image when we do not honour our commitments. This reaction is likely a result of so many unfulfilled experiences with varying organisations and frontline staff.

A quick check in our respective workplaces will reveal the existence and recurrence of such breakdowns. How many workmates respond to e-mails, call back when they find a message or deliver as agreed on a commitment? This is an eye opener.

If the right attitude cannot be attained with internal clients we are familiar with, what can an organisation expect when staff are dealing with an external party?

Organisations must prominently preach and entrench the right attitude towards customer contact. A sense of urgency must be applied in all situations as a catalyst for exceptional customer experience. This will inevitably show in how queries are handled, feedback provided and how the entire communication chain holds firmly together.

3. Service agenda adoption

There are various presentations that are done in corporate boardrooms. Nothing wrong with the flowery Powerpoints.

However, the handicap arises when well intentioned pronoucements or plans remain in the confines of those four boardroom walls. The aspirations do not filter to the rest of the organisation in such situations.

The importance and place of service in an organisation must be resplendent when staff observe senior management’s attention to customer experience.

Where feasible, as much input and insights as practical must be incorporated in such plans. There is a mine of knowledge and feedback at frontline level.

A feedback loop must be complete so that frontline insights are captured at the top level. This enhances the likelihood of crafting plans that address customer feedback.

Inevitably, this suggests that the divide between top level aspirations and frontline experience will not be wide. The customer wins in the end. So does the organisation.

4. Incentivising service

It has always been easy for sales to be recognised and rewarded. This is largely on account of clear metrics such as revenue generated. This should not be translated to mean service cannot be rewarded as well.

Therefore, there is need for an organisation to consider formulation of quantifiable performance indicators and reward consistent achievement.

Indicators would include customer satisfaction, complaints received, resolution time or creative initiatives to boost customer experience.

Similarly, rewards vary. They could be quarterly or annual bonuses, recognition certificates, random but regular prizes for exceptional accomplishments or even career progression.

Organisational plans and ensuing actions should demonstrate that customer service is considered as a strategic pillar. It’s critical place must never be in doubt.

5. “Customer service is a job” myth

Everyone delivers on customer service. The sooner organisations realise and appreciate this fact, the likelier it is for improvement to be noted.

The criticality of this is best understood in terms of process design and inter-unit response times or Service Level Agreement (SLAs). Most customer requests, complaints or general feedback handled at one level have dependence on other units.

It therefore follows that the relationship or flow of work must be smooth. Expectations and standards must be consistent across all units thus dispelling any misconception that customer service is only for service staff or a specific team.

6. Lack of action on feedback

Organisations require structure around the pooling of customer and staff feedback. A lot of information and opinion exchange occurs in frontline interactions with customers.

There must be a 360 degree loop that captures this feedback and how it filters through to closure. This entails a focus on e-mail, SMS, written or phone contact from customers. In most cases, this also demands that a specific person is accountable and responsible for this function.

Deliberate fora or platforms must also be in place to comprehensively analyse service performance. This must encompass any breakdown in delivery, root cause analysis and remedial actions to be taken.

7. An inward perspective

Most organisations do not take an outward view to appreciate customer perception of services or products offered.

This is evident in some policies, systems or changes made which are designed internally but with immediate external discontent. As much as practical, an organisation must do things with the customer in mind.

Such an approach builds on customer centricity. Perhaps we would even see the demise of rhetorical service statements merely meant to be politically correct or to impress in the boardroom.

8. Groom, train and invest in the frontline

There is a gap created when organisations recruit individuals to manage service delivery. It appears in most cases, the drive ends at recruitment. From that point, expectation grows as miracles or a dramatic turnaround becomes the anticipated result.

This poses a challenge. Recruitment is not an end in itself. You may identify and select the best fit in terms of skills, personality and attitude. But they will need consistent support.

This support can be rendered in various forms. These may include training, product information availability, enpowernment to enhance decision making and even the elimination of bureaucracy that impedes swift service delivery.

Additionally, processes, systems and policies require an investment of sorts to facilitate exceptional service delivery. The mention of investment usually creates a perception that millions of dollars must be expended.

Grooming standards, coaching, flexible decision making units and mechanisms to track turnaround time need not gobble millions. They can be devised, consolidated and implemented with just the right drive at all levels.

9. Benchmarking

An organisation must not operate as an island. There are several cases of best practice that can be emulated. This has the benefit of eliminating the burden to reinvent the wheel.

So many good things happen in customer service across different sectors. Regardless of the sector an organisation is in, it is of immense value to vigilantly assess how service is delivered elsewhere. It may just be astounding how much can be learned.

The key here is to be cognisant of the fact that learning is in dual form. An organisation can learn from poor service while also aspiring to match the best in class.

This benchmarking must be well structured to add value. Observations made and learnings picked should be analysed for adoption appropriateness and improvement plans. This aspect can be tied in with the suggested forums mentioned above to dissect service performance.

10. Think and build confidence

Let the frontline know what they can do and let customers also know the frontline has all it takes to deal with issues. On several occasions, I have noted how frontline staff struggle with indecision or an inability to project the confidence of someone able to resolve matters.

This may be a result of a culture that reposes decision making only at a certain level. Or perhaps, it could well be a case of recoiling after being scorched for setting a foot wrong in the past.

However, these all present opportunities to coach staff and stimulate not only confidence but competence as well. This can be explored and tackled through planned discussion sessions, role plays with varying scenarios and enhancing product knowledge.

While this goes on, it must never be forgotten that those team members that exemplify exceptional customer service must be applauded. Such simple acts can effectively work to endorse the right behaviours and motivate other team members to emulate.

From all the above ten factors, it can be deduced that customer service will continue to retain strategic importance. More so in the current competitive landscape where every customer matters and differentiation has steered away from products solely.

Organisations that trivialise this pillar undoubtedly do so at their own peril.

MTN BEEG SCANDAL: Telecoms game changer?

01 May

Of competitions, scandals and opportunity

Every business banks on publicity for its sustained customer growth. This is the bedrock for all advertising, Public Relations and effective marketing programs.

However, the challenge is when the publicity is not planned or positive. This is the dilemma MTN Zambia finds itself in. The second largest and fast growing Mobile Service Provider (MSP) has been adversely hit by negative publicity after a scandalous revelation about their last promotion dubbed “Let’s Go BEEG”. The Livingstone winner, it has been reported, was handed the prize with the aid of her male companion, an IT Specialist in MTN’s employ.

The nightmare and repercussions of this will test MTN’s planning as they seek to recover from this damaging story at a time they have pitted themselves strongly against market leaders Airtel.

A call to innovate

Conversely though, the scandal exposes yawning lapses in the sector that also need review.

Key among these is the aspect of innovation in the face of stiff competition. It is almost certain in Zambia that each month the MSP’s will roll out some competition. This is mostly along the lines of “send SMSes or topup! The more you do this, the higher the chances to win”.

This is an acquisition strategy with the intent of driving immediate subscriber numbers. I am of the view though that it is a tired method. It may well be the easiest(perhaps cheapest too) going by the frequency with which our three(3) MSPs use it. There must be other ways that can be employed and bigger more developed markets can provide pointers.

It therefore is imperative for our players in the sector to explore these and find more refreshing, cost effective and innovative ways to stimulate their subscriber and Average Revenue Per User (ARPU) performance. I am sure with the marketing teams in place, this is an avenue that is not beyond the players.

Product range and bundling

Additionally and as an extension on the above, bundling is a cost effective way that also ensures stickiness of customers. If one gets offers or incentives with voice, SMS, data and hardware in one package, they are likely to remain active on the network.

The trend in Zambia for a while has centred more on voice and text only. Even usage on these services is not where it should be.

Zambia can do better. The creativity on product range falls squarely on the MSPs. Government on the hand can coordinate with the players to understand their cost structure so as to facilitate measures to manage these costs better.

Ball watching regulators?

Measures have been announced on how MSP competitions will be closely watched to avert a scandalous recurrence. This is commendable.

The concern and unfortunate bit here is that this is a reactive action. It now is blatantly clear that ZICTA and the ZCPC paid passive attention to MSP activities. It may appear the three players in the market self regulated before this scandal.

The expectation was and should be that a billion kwacha scandal of such proportions could not see the light of day. This is an assumption underpinned on a belief that the regulatory or monitoring stakeholders appreciate the end to end mechanics of the systems used in such competitions. This then would not encourage any dubious plans to be crafted as the case was with the IT Specialist at MTN.

The hope now is that this episode will spur the relevant stakeholders into action, with an aggressive intent to identify and seal any possible loopholes. Similarly, comprehensive and periodic stress tests will be undertaken. This will prompt the telecom companies to equally invest in this aspect and ensure they are not exposed any further.

Tariffs and service

Furthermore, the regulators must now inspire public confidence and show understanding of the MSP pricing structures.

What makes up the tariffs customers are charged? Even more, how are the billing systems set up such that a minute’s call, text or data use is billed for exactly that? It is not unusual in Zambia for customers to complain about being billed noticeably higher than normal after a call. These are not new queries and ZICTA was recently on record stating that they are investigating this.

We await their findings and actions.

Additionally, service performance of the MSPs raises concerns every so often. There have been complaints of dropped calls, unreachable people when their phones are not outside coverage area, erratic internet performance etc.

All the MSPs currently claim to offer 3G services with one ISP going further with 4G. However, what difference this has made for customers remains unclear. Whether internet access becomes cheaper and efficient in real terms is a basis for further debate as it only seems like the 3G, 3.75G or 4G is a mere marketing ploy.

Service must also extend beyond product performance to customer service at frontline or even Call Centre level. Investments must be made in systems that will enhance service delivery.

This does not mean this challenge is only associated with telecom companies. It is an inherent and chronic problem across sectors in Zambia. The MSPs though have the upper hand when it comes to service improvement. The monitoring tools and frameworks are easily available to ensure service teams render exemplary service.

Audit the auditors?

The issue is not only on the part of regulators. Questions need to be asked regarding the credibility of the appointed auditors during such competitions.

The “Let’s Go Beeg” competition was certified or so we are told. If this is accurate, what constituted the certification? Further, does the engagement of auditors entail understanding the end to end process of selecting the winners? Or is this perhaps only certification of the last day of the competition, the prize giving ceremony?

It will be of interest to get the position taken by Grant Thornton, the auditors and ZICA on this matter.

Whichever way it goes and whatever constitutes the auditors’ terms of reference during such events, there is urgent need for keener attention on how competitions are certified.

What next for Telecoms in Zambia?

Zambia has an official population of 13 million plus with a literacy rate of 71%. Yet mobile phone penetration is only 38%. Contrast this with Zimbabwe, with all its recent economic pressures for instance, which has a population of 12.6m, literacy rate at 91% and mobile phone penetration of 60%. Or even Senegal with a 12.9m population with 67% mobile phone penetration.

On a simplistic basis, this shows that with 71% literacy, Zambia has the potential and capacity for its population to use mobile phone services with the right awareness interventions. Coupled with that, there have to be complementing efforts to drive income levels so people can afford the hardware and airtime for usage.

This shows that potentially, there still is a lot for the three MSPs to grow in the market. Statistics though are one thing and incomes play a huge part in harnessing this potential.

At face value, it appears the players in the sector must ingeniously devise ways to penetrate the “un-phoned” urban and rural populations able to utilise mobile phone services. The trends offer a ray of hope. In 2011, reports indicate that out of about 78 mobile payment ventures rolled out globally, half were in Africa. This is one area still at infancy stage in Zambia as is internet usage due to low penetration levels.

The future is Africa

The latest African Development Bank (AfDB) projections are GDP per capita amounts of $5,600 in 2060 from $1,667 as at 2010.

The working age population is expected to triple by 2060 from the 2005 figures. With investment in education, this presents a rise of a demanding middle class.

A simple review of these daunting statistics shows potential for telecoms players in view of current revenue and margin pressures.

More people will be able to use more mobile devices from handsets to dongles. This may as well translate into subscriber growth, airtime sales, data bundle usage and mobile payment services penetration.

MSPs therefore need to plan with a collective mind on this potential. How can subscribers be acquired and retained? How accessible and affordable can devices be? Where can these handsets, laptops or dongles be sourced for more people to get them at lower prices thus reducing setup costs? What is the long term potential and value of strategic partnerships to bridge the device availability/affordability gap? Huawei, Nokia etc are already active on the continent and have courted MSPs. Are these partnerships working?

How flexible and affordable can tariffs be to stimulate revenue through streams like data, airtime, mobile commerce or other services? For instance, as per the AfDB projections, Broadband internet as at 2010 stood at 5.6% of the continental population but is expected to leap to 99.1% in 2060. What does this mean for Zambia?

Lessons from the BEEG scandal

The scandal has brought opportunity to the fore. An opportunity to assess how things are currently done and what should be pursued differently to sustain businesses.

Only when new innovative ways are considered will we see an end to the routine competitions we now see. Instead, sustainable, long term and different methods can be employed.

Likewise, elements such as product and service performance will be paramount differentiators among MSPs.

Who wins in the end? The customer. Meaning the businesses too.

The MTN scandal is a timely wake up call for all players in the telecoms sector and beyond for those willing to learn from it.

Express It Now!

Category Archives: Business

Lessons a virus taught us

A national airline, do we need it?

10 likely reasons why your customer service is not improving.

MTN BEEG SCANDAL: Telecoms game changer?

Archives

Blogs I Follow

Follow this blog

Latest