South Africa is witnessing a growing number of mobile virtual network enablement (MVNE) platforms. These help mobile virtual network operators (MVNOs) to launch and manage their mobile services without having to build their own network infrastructure.
This, as the country’s MVNO landscape is continuously growing, with new players offering competitive pricing and flexible plans without the same level of investment required by traditional mobile network operators (MNOs).
Banks, insurance firms and major retailers are driving competition in the sector by launching their MVNOs.
Yesterday, Melon Mobile became the latest company to launch an MVNE platform, called Melon Digital, which allows businesses to offer mobile connectivity to their customers, under their own brand.
“Our goal has always been to shake things up,” says Calvin Collett, CEO of Melon Digital. “The mobile industry has been slow to evolve, and customers have been stuck with outdated, inflexible and expensive solutions for too long. We built Melon Digital to change that – offering a fully digital, scalable platform that makes launching an MVNO easier.”
This week, Telkom joined the MVNO race through a partnership with an unnamed MVNE platform provider. Telkom, together with its platform provider, intends to provide solutions to enable and support MVNOs.
Earlier this year, JSE-listed Huge Group entered the MVNO space with its Huge NXTGN MVNE platform.
Cell C was the first operator to host MVNOs on its platform, before MTN and Vodacom launched their own platforms.
Local market analyst firm BMIT expects the MVNO market to grow from around 4.8 million active subscribers at the end of this year, to 11 million to 12 million by 2029 − representing a compound annual growth rate of 18%.
Africa Analysis projects that by December 2028, the entry of large retail brands could further propel growth, potentially elevating the market to 13.5 million SIMs.
Constant connectivity shift
Andre Wills, MD of Africa Analysis, says the number of operational MVNE platform providers in SA has increased from five to 10 over the past two years.
He notes this accelerated growth reflects a significant shift in the country’s MVNO landscape, which is evolving beyond early adopters, as a growing number of new brands prepare to enter the market in the coming years.
“The expanding availability of MVNE platforms plays a pivotal role in streamlining market entry, significantly lowering barriers for new entrants. This is particularly impactful for non-telecommunications brands seeking to diversify into the digital services ecosystem, as MVNEs facilitate rapid onboarding and operational scalability,” says Wills.
Christopher Geerdts, MD of BMIT, comments that several big brands in SA have proven how well the model can work, leading others to follow.
MVNEs offer guidance on the commercial and technical aspects of market entry, and reduce costs as well as complexity, he points out.
“For example, integrating into host mobile operators is complex and expensive, but MVNEs have already invested in the platforms needed and have made the integration more efficient, reducing costs and deployment times, which ultimately reduce risk and time to market. The MVNO can redirect their investment into marketing and growing the business faster.”
He adds that MVNEs further reduce costs through sheer economy of scale, by aggregating all of their traffic. “They can then negotiate better terms, so that ultimately, the MVNO can get better pricing via an MVNE than going directly to a mobile operator, especially during the start-up stages of the company.
“On the other hand, we recently saw how individual MVNOs, like Capitec and FNB Connect, have outgrown the largest MVNEs. At the same time, advances in cloud-based platforms create faster, more scalable, flexible and more cost-effective MVNE capabilities than legacy systems are able to offer.”
Geerdts highlights that Cell C, MTN and Vodacom have made significant investments in their own MVNE, advisory and onboarding capabilities.
“Vodacom, for example, in line with its evolution as a ‘techco’, plans to offer services beyond voice, messaging and data, such as aspects of fintech, in several markets. MTN is already enabling a significant number of virtual network operators on the access point name and internet service provider side, which are not defined as MVNOs in the strictest sense.
“Melon Mobile’s cloud-based platforms could be a very exciting contributor to the MVNE space through its new Melon Digital division, not only leveraging platform capabilities, but also the existing aggregation capability grown by its Melon Mobile and Melon Business divisions, which are fundamentally digital-first in their approach.
“The Huge NXTGN platform-as-a-service offering is exciting as it builds on Huge’s experience with retailers and other corporates, and should help lower the barrier of entry for enterprises considering the MVNO market.”
Maximum reach
Wills notes that the growth of MVNEs is unlikely to significantly impact retail pricing in the short-term, as usage charges remain the dominant cost driver for subscribers, and are largely controlled by host MNOs.
However, he says, the rapid expansion of MVNE platforms is materially lowering the barriers to entry for new MVNOs by reducing the infrastructure and operational complexity associated with launching mobile services.
“Over the medium-term, this proliferation of MVNOs is expected to intensify competition in the mobile communications market.”
Wills believes that while immediate pricing shifts may be limited, increased competition will likely manifest in enhanced customer service, more personalised offerings and innovative value-added services.
“As these differentiated experiences gain traction with consumers, pressure on retail pricing will gradually mount, driving MNOs and MVNOs alike to reassess pricing models to retain market share.”
The MVNE trend in SA is likely to experience a deceleration in growth moving forward, he predicts.
“While the past two years have seen a rapid increase in MVNE platforms, this level of expansion is not expected to continue at the same pace. Given the current number of active platforms, the market appears to be approaching a point of MVNE saturation.
“We may still see one or two additional MVNE entrants targeting niche verticals or offering specialised capabilities; however, the broader platform landscape is unlikely to expand significantly beyond its current size.
“Instead, the focus will likely shift from new platform launches to consolidation, differentiation and platform optimisation, as MVNEs compete to deliver superior onboarding experiences, operational efficiencies and value-added services to MVNO clients in an increasingly competitive ecosystem.”
Geerdts says MVNEs will continue to play a significant role in the enablement of MVNOs in SA. “The larger MVNOs will likely invest in their own platform capabilities, as is already the case with a few of the banks, and the mobile operators will seek to expand their own offerings. However, more niche players are likely to enter the market.”
He adds that MVNEs have brought many new ideas and additional distribution leverage to the market, providing more flexible price plans, better customer service and more integrated value propositions.
“Ultimately, this has brought more competition into the market, which not only helped to drive down costs to the end-user, but also helped to shape innovations by the mobile operators. For example, month-to-month price plans making use of debit card payments have become a real alternative to prepaid airtime-based purchasing of data bundles.”
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