Internet service provider MWeb is asserting itself as a telecommunications provider, by expanding its brand into a traditionally under-serviced market.
The company opened its first physical retail store, at the new Maponya Mall, in Klipspruit, Soweto, last week. A second store will open at the Cresta shopping centre, in November.
GM of MWeb Home Natalie Thayer says expanding the company's brand in Soweto provides new growth opportunities. "It [the store] complements our existing retail model where we resell via department stores and allows us to increase our footprint and reach."
She says the Soweto market is vastly under-serviced when it comes to technology offerings and there is huge potential for growth in this area.
Asserting its independence
Arthur Goldstuck, MD of World Wide Worx, says MWeb's new physical retail strategy is the company's golden opportunity to position itself independently from SA's other telecoms providers.
"MWeb is trying to position itself as an independent provider and its first opportunity came when it was given a WiMax licence."
Goldstuck says the licence meant the company was no longer trapped by the pricing models of the external telecoms products it sold.
"MWeb, as an ISP [Internet service provider] is completely stagnant and the overall user base has not increased for several years. The company needed to find a new growth strategy."
According to Goldstuck, establishing the physical retail outlets is the next logical step for the company to make. "The general strategy for South African telcos is to have a physical retail presence in the major centres, so the planned stores for MWeb make excellent business sense."
He says Soweto is expected to be the biggest growth market of the near future. "So it really is the next logical step for MWeb."
Cresta also represents a good strategy, says Goldstuck. "All the telcos are represented in the shopping centre and MWeb will want to do the same."
Hands on
Thayer says having a store will also give the company control over its brand in the retail space, "which is important in the current competitive environment".
She says the reason for having a physical presence is twofold: "Firstly, to provide clarity on a market where there are many connectivity products and users must choose the right one. And, secondly, to be an effective competitor in the telecoms space.
"We already have over 100 Soweto residents on our WiMax trial and the interest and demand for fast Internet access has been tremendous. The new MWeb store will offer easy access for users to experience technologies in action, which we believe will drive further interest," she adds.
The company says the store will be interactive, allowing small business and home users the opportunity to test the available products before buying.
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