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Mobicel is changing the mobile game

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It’s a South African brand that is little known in higher income segments, but Mobicel is about to break out of the entry-level mould, writes ARTHUR GOLDSTUCK.

South Africa has a long history of unknown mobile brands that start off catering for entry-level phone users, briefly threaten to challenge the big names, and then fizzle out like a fading signal from a derelict cellular mast.

Barely a year ago, for example, AG Mobile was the big story in local branding. It had sold millions of feature phones and low-cost smartphones, through mass-market retail chains like Jet and Pep. It was designed locally, manufactured in China, imported, and packaged for local tastes. It was a decade-long success story.

But then it overreached, produced a series of phones aimed at both low and middle-income segments, all the way up to mid-range smartphones. Not only that, but it flooded the market with handsets in the hope of replicating its success at the low end.

Overnight, the business collapsed as sales failed to keep up with the heady pace of imports. In a matter of days, the brand vanished from the shelves.

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Meanwhile, a second South African brand had been replicating AG’s success at the entry level. The decade-old Mobicel catered for every budget, if that budget was below R500 to buy the phone outright. At the top end of the market, where that amount and more is spent every single month on contracts, Mobicel was completely unknown.

Soon, that may change. Mobicel is about to venture on the path treaded by AG Mobile when it ventured outside its comfort zone.

There is one fundamental difference, however, said founder and CEO Ridhwan Khan: not only are quantities being carefully managed, but Mobicel is not committing itself to manufacturing capacity that cannot be covered by existing resources, and it is hitting the market with what it calls premium phones, at reasonable prices.

Mobicel founder and CEO Ridhwan Khan

Mobicel founder and CEO Ridhwan Khan

The Mobicel R9 and R9 Plus, launched last week, are rare examples of devices that really can change the mobile game.

The R9 Plus is an Android phone that sports not only a 5.7-inch touch screen, but also edge-to-edge display. Samsung has pioneered the concept with its flagship phones for a number of years, with Apple following suit in its latest iPhones this year. Only LG, with its Q6 released a few months ago, had introduced edge-to-edge screens in a mid-market phone.

So is this a mid-market phone? Perhaps a new category is needed. In a sense, Mobicel is following the lead of Chinese brand Xiaomi, which markets its mid-range smartphones as “high value, affordable devices”. But, at a price of R2 999, the Mobicel R9 Plus probably represents the best value-for-money yet in terms of features versus cost.

The truly remarkable feature of the phone, which does not appear to have been adopted by any other major manufacturer, is that it has flipped the traditional approach of having a premium camera on the rear of the phone and a lower-quality lens on the front for selfies.

With the R9 Plus, the selfie takes pride of place, with a dual front camera. One lens comes in at 20 Megapixels and the other at 8 MP. Mobicel describes it as the “Super Selfie” dual lens camera. It also offers a 120 degree wide angle view, along with “Super Low Light capability”.  And, like most mid- to –high-end phones, it sports a fingerprint sensor.

The slightly stripped down sibling of the Plus, the R9 Lite, will come to market at just under R2000. Both offer a 24-month warranty.

“We’ve created a handset with exceptional build quality, offering the latest technology, and the kind of features only ever before seen on handsets that cost four times as much,” said Kahn.

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Mobicel founder and CEO Ridhwan Khan

“We’ve used our experience, our understanding of the customer base and our economies of scale to offer them an opportunity to migrate from whatever device they’re using to our premium smartphone.”

Mobicel’s stratetic advantage is that it distributes through more than four thousand retail outlets, ranging from the smallest store to large discount chains. It will begin selling the new devices from the beginning of next month, both through retailers and online via Takealot.com.

“There is a big void between phones like the Vodafone Smart Kicka at R399, and the feature-rich smartphones from Samsung and Huawei,” Kahn said in an interview after the launch.

“No one’s filling that massive gap, almost indoctrinating consumers to the idea that if you really want a nice device you have to pay R6000 upward. There’s a massive opportunity. If we can play in the space between R1 500 and R3 000, we will start filling the void.

“Our biggest challenge is making the user experience an awesome one so that when people buy and use the device, whatever reservations they had about the price point is gone. We want people to experience the brand, so we are keeping margins very thin, and a big part of our margin is being put into building a local brand.”

This is uncharted territory for a businessman who entered the cellphone industry in 2002 by bringing in refurbished handsets from the United Kingdom. He would clean them up, and sell them as demo units. By  2007, demand had exceeded supply, and he realised there was a massive market waiting for him.

The first Mobicel handset, back in 2007, was the M404, a1.8-inch dual-SIM feature phone. That’s the year Apple launched the iPhone and sparked the smartphone revolution. It’s taken a decade for Mobicel to break out of the feature phone market, and now it wants to spark an equivalent revolution in the South African mass market.

Said Kahn, “The end game is to provide powerful smartphones without the hefty price tag.”

  • Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee and on YouTube.

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Online retail gets real

After decades of experience in selling online, retailers still seek out the secret of reaching the digital consumer, writes ARTHUR GOLDSTUCK.

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It’s been 23 years since the first pizza and the first bunch of flowers was sold online. One would think, after all this time, that retailers would know exactly what works, and exactly how the digital consumer thinks.

Yet, in shopping-mad South Africa, only 4% of adults regularly shop online. One could blame high data costs, low levels of tech-savviness, or lack of trust. However, that doesn’t explain why a population where more than a quarter of people have a debit or credit card and almost 40% of people use the Internet is staying away.

The new Online Retail in South Africa 2019 study, conducted by World Wide Worx with the support of Visa and Platinum Seed, reveals that growth is in fact healthy, but is still coming off a low base. This year, the total sale of retail products online is expected to pass the R14-billion mark, making up 1.4% of total retail.

This figure represents 25% growth over 2017, and comes after the same rate of growth was seen in 2017. At this rate, it is clear that online retail is going mainstream, driven by aggressive marketing, and new shopping channels like mobile shopping. 

But it is equally clear that not all retailers are getting it right. According to the study, the unwillingness of business to reinvest revenue in developing their online presence is one of the main barriers to long-term success. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.

On the surface, the industry looks healthy, as a surprisingly high 71% of online retailers surveyed say they are profitable. But this brings to mind the early days of Amazon.com, in 1996, when founder Jeff Bezos was asked when it would become profitable.

He declared that it would not be profitable for at least another five years. And if it did, he said, it would be in big trouble. He meant that it was so important for long-term sustainability that Amazon reinvest all its revenues in customer systems, that it could not afford to look for short-term profits.

According to the South African study, the single most critical factor in the success of online retail activities is customer service. A vast majority, 98% of respondents, regarded it as important. This positions customer service as the very heart of online retail. For Amazon, investment back into systems that would streamline customer service became the key to the world’s digital wallets.

In South Africa online still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature. 

Clothing and apparel is the fastest growing sector, but is also the sector with the highest turnover of businesses. It illustrates the dangers of a low barrier to entry: the survival rate of online stores in this sector is probably directly opposite to the ease of setting up an online apparel store.

A fast-growing category that was fairly low on the agenda in the past, alcohol, tobacco and vaping, has benefited from the increased online supply of vapes, juices and accessories. It also suggests that smoking bans, and the change in the legal status of marijuana during the survey, may have boosted demand. 

In the coming weeks, we can expect online retail to fall under the spotlight as never before. Black Friday, a shopping tradition imported “wholesale” from the United States, is expected to become the biggest online shopping day of the year in South Africa, as it is in the USA.

Initially, it was just a gimmick in South Africa, attempting to cash in on what was a purely American tradition of insane sales on the Friday after Thanksgiving Day, which occurs on the third Thursday of November every year. It is followed by Cyber Monday, making the entire weekend one of major promotions and great bargains.

It has grown every year in South Africa since its first introduction about six years ago, and last year it broke into the mainstream, with numerous high profile retailers embracing it, and many consumers experiencing it for the first time. 

It is now positioned as the prime bargain day of the year for consumers, and many wait in anticipation for it, as they do in the USA. Along with Cyber Monday, it provides an excuse for retailers to go all out in their marketing, and for consumers to storm the display shelves or web pages. South African shoppers, clearly, are easily enticed by bargains.

Word of mouth around Black Friday has also grown massively in the past two years, driven by both media and shoppers who have found ridiculous bargains. As news spreads that the most ridiculous of the bargains are to be had online, even those who were reticent of digital shopping will be tempted to convert.

The Online Retail in SA 2019 report has shown over the years that, as people become more experienced in using the Internet, their propensity to shop online increases. This is part of the World Wide Worx model known as the Digital Participation Curve. The key missing factor in the Curve is that most retailers do not know how to convert that propensity into actual online shopping behaviour. Black Friday will be one of the keys to conversion.

Carry on reading to find out about the online retailers of the year.

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Reliable satellite Internet?

MzansiSat, a satellite-Internet business, aims to beam Internet connections to places in South Africa which don’t have access to cabled and mobile network infrastructure, writes BRYAN TURNER.

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Stellenbosch-based MzansiSat promises to provide cheap wholesale Internet to Internet Service Providers for as little as R25 per Gigabyte. Providers who offer more expensive Internet services could benefit greatly from partnering with MzansiSat, says the company. 

“Using MzansiSat, we hope that we can carry over cost-savings benefits to the consumer,” says Victor Stephanopoli, MzansiSat chief operating officer.

The company, which has been spun off from StellSat, has been looking to increase its investor portfolio while it waits for spectrum approval. The additional investment will allow MzansiSat’s satellite to operate in more regions across Africa.

The MzansiSat satellite is being built by Thales Alenia Space, a French company which is also acting as technical partner to MzansiSat. In addition to building the satellite, Thales Alenia Space will also be assisting MzansiSat in coordinating the launch. The company intends to launch the satellite into the 56°E orbital slot in a geostationary orbit, which enables communication almost anywhere in Africa. The launch is expected to happen in 2022. 

The satellite will have 76 transponders, 48 of which will be Ku-band and 28 C-band. Ku-band is all about high-speed performance, while C-band deals with weather-resistance. The design intention is for customers of MzansiSat to choose between very cheap, reliable data and very fast, power-efficient data. 

C-band is an older technology, which makes bandwidth cheaper and almost never affected by rain but requires bigger dishes and slower bandwidth compared to Ku-band connections. On the other hand, Ku-band is faster, experiences less microwave interference, and requires less power to run – but is less reliable with bad weather conditions.

MzansiSat’s potential military applications are significant, due to the nature of the military being mobile and possibly in remote areas without connectivity.  Connectivity everywhere would be potentially be life-saving.

Consumers in remote areas will benefit, even though satellite is higher in latency than fibre and LTE connections. While this level of latency is high (a fifth of a second in theory), satellite connections are still adequate for browsing the Internet and watching online content. 

The Internet of Things (IoT) may see the benefits of satellite Internet before consumers do. The applications of IoT in agriculture are vast, from hydration sensors to soil nutrient testers, and can be realised with an Internet connection which is available in a remote area.

Stephanopoli says that e-learning in remote areas can also benefit from MzansiSat’s presence, as many school resources are becoming readily available online. 

“Through our network, the learning experience can be beamed into classrooms across the country to substitute or complement local resources within the South African schooling system.”

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