Investment firm Huge Group is eyeing the bulging mobile virtual network operator (MVNO) market, and plans are afoot to create a company that provides MVNO enablement services to consumer brands.
Huge today reported its financial results for the six months ended August, saying it will launch Huge Digital − a new firm that will offer branded mobile services to MVNOs.
The intensified push in the MVNO space comes after it concluded a series of transactions to acquire Tethys Mobile, the company formerly known as Virgin Mobile SA.
Commenting on Huge’s MVNO plans and the new entity, James Herbst, CEO of Huge Group, says: “The company owns a state-of-the-art multi-tenant-capable technology platform that is capable of enabling consumer brands with their own branded mobile products and services.
“Huge Digital aims to launch in the South African market early in 2023 and will work closely with mobile network operators in offering branded mobile services to a long list of candidate MVNOs, many of whom have very large existing consumer bases.”
Veran Kathan, chairman of Huge Group, adds: “There are now many brands in many industries, numbering in the hundreds, who desire to own the digital channel between themselves and their customers – and to do so successfully will require virtual access to a mobile network and access to the digital platforms owned by Huge Digital.
“Huge Digital is keenly placed to partner with these branded MVNOs and the mobile networks who will provide them with access.”
Kathan notes Huge is already lining up to offer services, and is responding to MTN’s request for proposal for digital enablement services.
The growing need for low-cost mobile services is boosting the demand for MVNOs globally.
In SA, Capitec is the most recent brand to introduce an MVNO service, promising data and airtime at discounted rates.
Capitec now competes with Standard Bank and First National Bank, which introduced similar services locally several years ago.
Other local MVNO brands include Shoprite Group, Sakeng Mobile, Mr P Mobile and PnP Mobile − Pick n Pay's MVNO.
The MVNO sector is a new target for Huge, which invests in entities that operate in the converging connectivity, cloud, software and x-tech markets.
“Huge Group’s strategy is centred on managing its portfolio of investments to generate greater revenue, margin, profit and cash flows, generating returns from the receipt of interest and dividends from these investments, as well as generating profit from the disposal of investments,” explains Herbst.
“Its approach is that of investment holding entity as opposed to a consolidated operating group.”
As at 31 August, Huge Group had nine principal investments, which Herbst says are in excess of R1.5 billion. Its investment portfolio includes Huge Connect, Huge Networks, Huge Technologies and Huge Telecom.
Going forward, Herbst says: “The board’s strategy is to deepen Huge Group’s exposure to software and x-tech markets, and in this regard, is actively pursuing acquisitions in these markets to augment its current investment portfolio, which currently is biased in favour of connectivity.”
Huge’s investment reorganisation is in full swing. Earlier this month, the JSE-listed Huge Group folded Huge Networks and Huge Telecom into one business.
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