Vodacom South Africa’s long-term vision is to take its newly-launched mobile virtual network enabler (MVNE) business beyond South African borders, and establish it across all regions in which it operates.
Last month, Vodacom announced its new MVNO enablement platform, noting it had signed up retail giant Mr Price as its first client.
The move made Vodacom the third local mobile network operator to enter SA’s intensely contested MVNO market, after Cell C and MTN launched their enablement platforms in 2006 and 2020, respectively.
Shenge Buthelezi, managing executive of wholesale at Vodacom SA, tells ITWeb that despite it being a latecomer to MVNO enablement, Vodacom is well-positioned to become a strong contender in the market.
Buthelezi believes that as the telco already plays a ‘telco of telcos’ role − via its wholesale mobile roaming, undersea cable infrastructure, APNs and roaming access to its towers − this gives the operator a competitive advantage.
As its service grows in SA, Vodacom will identify key markets to support MVNO partners beyond SA, Buthelezi states.
The operator provides services to customers in 47 African countries, including Nigeria, Zambia, Angola, Kenya, Ghana, Côte d'Ivoire and Cameroon.
“From a wholesale services perspective, our MVNE platform is well-aligned to our techco strategy,” notes Buthelezi.
“For instance, we provide our MVNO partners with telco platforms and tools to run a successful MVNO without hefty up-front investments.
“We will, in future, seek to grow our MVNOs to reach all other markets where we operate. That will obviously be unlocked by the specific MVNO strategy and readiness of the Vodacom market in future, which we’re assessing.”
An MVNE provides network infrastructure and related services to an MVNO.
In SA, the role of MVNOs has grown significantly in recent years, driven by demand for more niche mobile services, Buthelezi notes.
According to a report by Africa Analysis, as of December 2023, SA’s MVNO service revenue was R4.4 billion, and is growing at a rate of 12% per annum.
This shows a healthy market, indicating increased customer adoption and revenue growth in the MVNO market, it says.
World Wide Worx estimates SA has about five million MVNO customers belonging to combined players in this space, including PnP Mobile, Boxercom, Poket Mobile, Sakeng Mobile, K’nect Mobile, TFG Connect, Capitec Connect, Melon Mobile and the recently launched Old Mutual Connect.
Buthelezi points out Vodacom’s approach is to enable partners to drive value and more meaningful ownership of its customers’ digital journeys – creating “cross-sell and upsell opportunities” across the MVNO’s entire value system.
“The approach taken by Vodacom is to provide its own platform so that the MVNO has an end-to-end telco service and ensures the seamless management of the MVNO subscribers. The MVNE platform also seamlessly integrates to the MVNO’s sales/distribution/acquisitions/retentions channels via application programming interfaces.
“This makes it easier to drive insights into the MVNE platform: to run campaigns, push through rewards, or promote any desirable behaviours, such as recurring purchases, or first recharge, or the number of days active on the network.”
Asked if MVNOs are still a commercially-viable business in a country with increasing competition, he explains that more competition can only yield better options for consumers.
“It is this very competitive nature that requires better value propositions than just a simple telco service, which is why we believe the MVNOs we on-board will use their core competencies in the spaces they specialise in, coupled with Vodacom’s reliable network and our basket of wholesale services, to create the value that separates the MVNO from the rest.”
According to Buthelezi, MVNOs that get better support from the host have the flexibility and sustainability required to differentiate themselves in this market.
“The SA market has had subscribers with multiple SIMs for a while, so the MVNOs will not shift that. Nonetheless, our focus will be more on creating better value through MVNO offerings than what’s already available.”
Andre Wills, MD of Africa Analysis, previously told ITWeb that one factor forcing some local network operators to venture into the MVNO space is that the telecoms regulator − the Independent Communications Authority of SA − stipulates that winners of large spectrum blocks in the high-demand spectrum auction, such as Vodacom, are required to host MVNOs.
“Another factor is that MNOs are building services that go beyond traditional telecommunications in participation in the digital world. This includes expanding into areas like fintech, media and the internet of things, to diversify revenue streams amid growing competition in the telecoms sector,” he noted.
Vodacom will soon announce another MVNO collaboration, as it looks to expand its partner network in SA.
“Without divulging too much, we are well on track to on-board and service more MVNOs. At the moment, we have signed up a retailer, but we’re not limited to any sector,” Buthelezi concludes.
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