Nashua

Nashua Mobile increased its customer base by 3,2% or 27 486 customers to 846 521. Average revenue per user has, however, decreased by 10% to R416 (2010: R463) due to the deactivation of LCR onbillers to VoIP, an extremely competitive and saturated market, and an increase in bad debt levels.

Management responded decisively and effectively to the challenges facing the business. Further cost-cutting measures were introduced, including reductions in employment, travel expenses, entertainment, logistics and marketing.

In addition to the impact of interconnect rate cuts on Nashua Mobile’s performance, the loss of a major LCR onbiller customer reduced the number of Nashua SIM cards in use by some 20 000. Bad debts, which rose 14% this year in line with generally tough economic conditions and growing unemployment, provided further cause for concern.

As part of rationalising costs, it was necessary to make 156 positions redundant across the business. While retrenchment costs amounted to about R14 million, cost savings of R46 million were realised.

The process of meeting the Regulation of Interception of Communication Act (RICA) requirement of registering all our users’ handsets was completed this year. At the end of June 2011, 96% of Nashua handsets had been registered, which compared favourably to other telecommunications service providers. This process required considerable time, energy and cost, the successful completion of which was a great reflection on the Nashua Mobile team.

An important growth area for Nashua Mobile is the financing of handsets. Currently some 134 000 devices are financed, with this aspect of the business increasing significantly by 91% from 70 000 in 2010.

During the year an international call-forwarding scam affected all networks and service providers. However, working decisively and promptly with our peers in the industry, this potentially burgeoning fraud was contained and charges brought against some of those responsible. To mitigate risk from this type of fraud in future, a high-usage team monitors suspicious spikes in customers’ usage and responds accordingly.

A key focus for 2012 will be the overhaul of Nashua Mobile’s IT systems to improve the billing ability and further enhance customer service levels. Another area of focus will be migrating prepaid customers to contracts, as research indicates that a significant number of customers are willing to migrate provided they are given sufficient incentive to do so and that the registration process is not cumbersome.