MVNOs in South Africa

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Unfortunately, Virgin Mobile stopped servicing its customers in September 2021 when Cell C terminated its services to the MVNO, which had changed shareholders and fallen on hard times. After 15 years of operations, the local telecoms market proved too tough for the pioneering MVNO to navigate.

In the intervening years, however, the MVNO sector has grown significantly, with brands across consumer-facing industries – from telecoms to banking and insurance to retail – launching their own mobile offerings.

Soulcare has put together a list of the most prominent MVNOs in the South African market. The list, while meant to be comprehensive, may exclude some of the smaller MVNOs, with some network operators reluctant to share the names of their clients.

MVNOs in South Africa

Most of the MVNOs in South Africa run on Cell C’s network infrastructure. In fact, only three of these, Pick n Pay Mobile, TFG Connect and Melon Mobile, use MTN. FNB Connect runs on both Cell C and MTN. Vodacom, Rain and Telkom Mobile do not carry any MVNOs on their networks – yet.

MVNOs can either connect directly to a network’s infrastructure or go via an independent enablement platform. Enablement platforms specialise in acting as an interface between the MVNO and the network operators.

Founded in 2012, MVN-X is a network agnostic mobile virtual network enablement (MVNE) platform that helps businesses integrate their MVNO into existing network infrastructure on the technical front and execute their MVNO strategy on the retail side.

Market development

According MVN-X CEO Valde Ferradaz, Cell C’s late entry into South Africa’s mobile telecoms market is the major reason why MVNO enablement became a strategic imperative for the operator.

“When Cell C entered the sector, the market was already dominated by Vodacom and MTN. Cell C’s decision to play in the wholesale arena early on helped it to tap into new distribution channels and niche markets. MVNOs are a great way for mobile operators to penetrate niche segments by using the brand affinity and consumer relationships that their partners have with their customers,” Ferradaz told TechCentral in a phone interview on Thursday.

Cell C was the only network to offer a platform for MVNOs and remained so until 2020 when MVN-X integrated Pick n Pay Mobile and Boxercom into the MTN network. Since then, the market has seen accelerated growth in MVNOs.

Read: FNB signs MTN as second MVNO partner

“Capitec, TFG, Mr Price Mobile, Pick n Pay and Boxer all entered the market in the last three to four years. In the last two years, we have seen a huge increase in the number of enquiries from large institutions and the market is poised for further growth,” said MVN-X chief commercial officer Daniel Swart.

Achieving success in the MVNO space is no easy feat. According to Swart, there are two types of MVNOs: pure telecoms plays like Melon Mobile and branded MVNOs such as TFG Connect and Capitec Connect. The latter use their brand power to tap into their existing customer base and offer mobile communications services as a value-add. These companies, Swart said, tend to be more successful than the telecoms MVNOs, even though having a captive customer base does not serve a guarantee of success.

“MVNOs need to gear themselves up to retain their customers. It’s a different space, so they must understand the market is competitive and customers behave differently to whatever their core business may be. However, the historical data that they have on their customers is a huge asset and can be used to offer added-value at the right time,” he said.

One the advantages that MVNOs bring to the marketplace is a diversification of retail products, expansion of consumer choice, improved competition between operators and greater value for consumers.

But MVNOs cannot grow if network operators don’t play ball, and historically, the larger operators have been reluctant to support MVNOs on their networks. As a result, communications regulator Icasa mandated “MVNO enablement” as part of its licensing agreement with mobile operators in the 2022 spectrum auction in an effort to support the expansion of the market.

WHAT IS AN MVNO?

An MVNO is a mobile virtual network operator. It uses the mobile network infrastructure provided by a mobile network operator like Cell C, but offers its own products and services, including billing and fulfilment on top of that network. So an MVNO does everything a mobile operator does, except running a network. Hence it is a "virtual" mobile network operator. FNB Connect, Capitec Connect, Mr Price Mobile, me&you, Standard Bank Mobile, uConnect and Shoprite k'nect mobile are MVNOs enabled by Cell C network.

THE CELLULAR MARKET AND MVNO

The cellular market in South Africa is worth about R100bn/year. It's a big market, and there are a number of opportunities where operators can't necessarily serve customers as well as a MVNO could.

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WHO IS IN CHARGE OF WHAT?

Cell C is currently the only mobile network operator in South Africa, who has opened their network to MVNO partner. We provide all the necessary support, expertise, infrastructure and platforms to allow MVNOs to operate.
As a Cell C MVNO partner, you own and manage the customer through targeted mobile product and service offerings under your brand that are tailored for your customers, based on your customer insights.

You own the customer
Services are offered under your brand
You design and decide the tariffs
Customer relation is managed by you
You are in charge of marketing, distribution, customer insights and the customer relationship
Cell C is in charge of the technical fulfilment, which can range from fully hosting the MVNO on our network

HOW DOES BECOMING AN MVNO BENEFIT THE PARTNER?

Becoming an MVNO is about leveraging and "mobilizing" your existing assets: your brand, your distribution, your customer base and your customer insights. Being an MVNO allows you to tap new sources of revenue and will improve your market share, your profit and your customer relations.

EXAMPLES OF SUCCESSFUL MVNOS UNDER CELL C

Have a look at some of our successful MVNOs to get a better understanding of the offering.

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