Research by Analytico revealed that HeroTel, Afrihost, and Cool Ideas have a low churn risk, while Webafrica and Cell C face the biggest churn risk.
Analytico is a South African IT and telecommunications research company that provides market research, network intelligence, and marketing insights.
Its research reports and insights portal use real-world tests, crowdsourced data, consumer surveys, and face-to-face interviews with executives.
In its 2022 South African ISP Report, Analytico analysed the risk of consumers moving from a specific ISP.
Also known as customer churn, it is one of the biggest business challenges for telecommunications operators and Internet service providers.
The churn rate, also known as the rate of attrition or customer churn, is the rate at which customers stop doing business with an entity.
A high churn rate makes it difficult for a service provider to grow or maintain its existing customer base.
Customers who feel they are not getting the service they pay for are more likely to leave their ISP.
Good service levels are essential to create loyal customers and reduce the churn rate. Analytico’s research shows a direct correlation between customer satisfaction and churn risk.
To ensure customer loyalty and hence a low churn risk, ISPs must ensure they offer competitive pricing, network quality, and customer support.
There is one exception — Herotel. It is in a unique position where it is both the infrastructure provider and the ISP.
When people use Herotel’s fibre or wireless network, they are forced to use Herotel as their ISP. Consumers are, therefore, locked in.
It shows in Analytico’s churn risk rankings. HeroTel has the lowest churn risk, outperforming Afrihost and Cool Ideas which have very high customer satisfaction ratings.
Other Internet service providers with a relatively low churn risk include RSAWeb, Metrofibre, and Home Connect.
On the other end of the scale, a high percentage of Cell C, Webafrica, and Rain’s subscribers said they are looking for a new ISP.
Rain, like Herotel, has the advantage of providing both the infrastructure — 4G and 5G networks — and the ISP service.
However, because of network quality problems and customer support issues, many of its subscribers are likely to move to an affordable alternative if it becomes available.
With network operators like Vumatel and Openserve aggressively rolling out fibre across the country, Rain should ensure its service levels are good enough to keep its customers happy.
The chart below shows the churn risk of South Africa’s largest Internet service providers.
