Telkom has become the latest South African telco to enter the bourgeoning mobile virtual network operator (MVNO) market.
In a statement, Telkom says it has joined the MVNO race through a partnership with an unnamed mobile virtual network enabler (MVNE) platform provider.
According to the company, signing the MVNE platform agreement will enable Telkom to meet the Independent Communications Authority of South Africa’s (ICASA’s) requirements while identifying and onboarding multiple MVNOs to strengthen its competitive position in the MVNO market.
ICASA requires mobile network operators to support at least three black-owned MVNOs as part of their spectrum licence conditions.
Telkom’s foray into the market comes as South Africa’s MVNO market is expanding rapidly, with banks, insurance firms and major retailers driving competition in the sector.
According to a recent report by market analyst firm BMIT, the local MVNO market will continue to outpace that of mobile operators for some time to come.
BMIT expects the 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%.
FNB Connect, Capitec Connect, PnP Mobile, Boxercom, Poket Mobile, Sakeng Mobile, K’nect Mobile, TFG Connect, Capitec Connect, Melon Mobile and Afrihost Mobile are some of the MVNO players in SA.
Earlier this year, JSE-listed Huge Group also entered the MVNO space with its MVNE platform called Huge NXTGN (pronounced next-gen). The platform enables organisations to launch their own MVNO platforms.
Cell C was the pioneering operator to host MVNOs on its platform before MTN and Vodacom also launched their own platforms as per ICASA’s demands.
“Since the sector’s inception in 2006, it has experienced steady growth, with subscriber numbers increasing by 51% year-on-year by the end of 2023, reaching 4.3 million users,” says Lunga Siyo, CEO of Telkom Consumer and Small Business.
“This growth is driven by consumer affinity, particularly to financial services providers, retailers and niche brands. These businesses seek to create unique branded mobile products and services, develop new value propositions and value-added services to enhance customer engagement for their own customers.
“The MVNO market is an exciting space, and we are eager to bring our network capabilities and infrastructure to enable and support new entrants. We are streamlining MVNO entry with a structured, scalable single-platform model. This simplifies integration, reduces operational complexity and ensures reliable network access.”
Telkom, together with its platform provider, intends to enhance its business, provide relevant solutions to enable and support MVNOs to establish and build sustainable businesses and presence in the market, says the telco.
“The company remains open to discussions with potential partners and is dedicated to providing the best support and technological capabilities to ensure the success of MVNOs in the market.
“Our expansion into the MVNO market aligns with our anchor brand purpose to seamlessly connect every South African, and to enable and assist brands to create value for their existing and new customers, irrespective of the industry in which they operate,” says Siyo.
Telkom is inviting brands interested in launching MVNOs to explore partnership opportunities.
“We see this as a long-term strategy to establish Telkom as a strong player in the MVNO space,” says Siyo.
“We are excited to finally enter the market and collaborate with brands across industries to develop and enable MVNO solutions that benefit all parties, with the customer as the top priority."
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