“Upwardly mobile consumers, especially those in the emerging middle class want the latest smartphone technology, but many are not yet able to purchase a device outright,” explains Lance Krom, founder and managing director at Phonefinder. “In these instances, they consider a cell phone contract to be the ideal means to get the phone they want without the capital outlay or traditional financing.”
However, due to increased competition from a broader cellular provider market, which now includes four major players in MTN, Vodacom, Cell C and Telkom, and literally thousands of contract options, Krom says that consumers often find it frustrating to compare options and find those that meet their specific needs.
“While this growth has been good for competition, especially with regard to price, buying a cell phone contract can certainly be confusing and complex,” he suggests, “which is why we launched Phonefinder in 2012.”
The website lists all available contract options in a neat, searchable and easy-to-understand manner. “Importantly, we’re unbiased. Visitors to our portal can search every mobile contract deal available based on the type of handset they desire, their preferred network, monthly costs, data bundles and voice minutes, or any combination of these criteria,” continues Krom. “Once they’ve selected their preferred option and submitted their details, a simple click of the ‘call me’ button will result in a service provider calling them back to sign up.”
By providing this service, Phonefinder has gained numerous insights into the buying habits of cell phone contract subscribers. “With over 20,000 inquiries received per month, we’ve been able to establish key trends in the sector,” he states.
According to these stats, when it comes to phone manufacturers, Samsung is the most popular brand, accounting for 47% of phone selected with contracts purchased via Phonefinder.co.za. “The Samsung Galaxy J5 Prime is the current top-seller as it is chosen as the preferred device in 20% of all contracts sold via the website,” adds Krom. The Samsung Galaxy Grand Prime Plus is selected in 6% of deals, ranking it fourth most popular.
Chinese smartphone manufacturer Huawei is currently the second most popular brand, with a 24% share among contracts purchased via Phonefinder. “The Huawei P8 Lite (13%) and Huawei P9 Lite (8%) are the top choices from this brand, in second and third, respectively,” says Krom.
The Apple iPhone 5S (16GB) rounds out the top five smartphone models, according to Phonefinder’s stats, accounting for 5% of sales.
Of secondary importance to the device, but still a major consideration in the final decision, is price and the composition of the package. “Since the coverage of smaller providers has improved, and with the ability to port numbers, consumers now like to hunt for the best deals,” explains Krom. “They’re looking for the most data and minutes at the lowest price, and they aren’t afraid to switch brands to get it.”
According to Phonefinder’s stats, mid-range contracts in the R189pm (24.4%) to R299pm (8.9%) price band are the most popular, with R199pm the second most popular option. “These contracts offer the right balance of affordability and the amount of data and minutes consumers need to make best use of their smartphones,” continues Krom.
And this deal-hunting trend is significant as it’s driving a major shift in the industry, he adds. “Our stats show that the current trend is a shift by consumers from the incumbent operators – MTN and Vodacom – to Cell C and Telkom as these operators are aggressively disrupting the market with value bundle deals and other unique offerings, such as call sharing.”
Phonefinder’s stats reveal that 29.9% of customers are moving from Vodacom to another provider, while 23.8% of MTN contract customers are choosing to change providers via the website. “Telkom appears to be the biggest gainer in this regard, with 42% of contracts selected via Phonefinder.co.za going to this provider,” states Krom.
Cell C is currently the second most popular provider, accounting for 27% of contract deals selected, with MTN in third (12%) and Vodacom in fourth (10%).
“From these figures it is clear that brand loyalty among cell phone contract subscribers is dead. The market has matured and providers are now competing squarely on device, price and added value. This bodes well for consumers as heightened competition leads to more options and cheaper prices, and with a service like Phonefinder at their fingertips, it has never been easier to find the best deal on cell phone contracts,” he says.