Supporting MVNOs like Capitec Connect is critical to Cell C’s successful turnaround, the mobile operator’s CEO, Jorge Mendes, has said.
Speaking to journalists on Tuesday during a company update media briefing, Mendes said Cell C has created a “home” in South Africa for mobile virtual network operators – other examples include Shoprite K’Nect Mobile and FNB Connect – on its network.
Despite the entry of MTN South Africa, Vodacom South Africa and Telkom into the market in the recent past, Mendes said he has no intention of ceding Cell C’s leadership position in providing a platform to support MVNOs.
The number of MVNOs in South Africa has burgeoned in recent years as consumer-facing brands whose focus is usually outside telecommunications – from banks to retailers – increasingly see offering data and voice services to their clients as an important value proposition.
Under MVNO arrangements, Cell C – and other mobile network operators or “enablement” companies – provides a platform on top of which firms can launch their own telecoms brands. It’s usually done as part of marketing or loyalty efforts to keep customers from considering alternatives.
Some of the more successful MVNOs in South Africa include Capitec Connect and Standard Bank Connect. There are also a few pureplay MVNOs such as Afrihost AirMobile (which utilises MTN’s network infrastructure and platform) and Melon Mobile (also MTN) in the mix.
And for Cell C, at least, the MVNO business is not proving to be any less profitable than its direct-to-consumer retail business, according to Mendes, who was responding to questions from TechCentral on Tuesday.
Costs
The profit margins are “very similar” and, in some instances, MVNOs are “more favourable”, Mendes said. He declined to provide “absolute numbers”, citing the “competitor sensitivity” of the information.
Selling directly to retail customers – as opposed to working through an MNVO – carries higher costs for network operators like Cell C, Mendes said. These costs include the production of plastic Sim cards, subsidies of those Sim cards, marketing and advertising costs, and distribution and logistics overheads. He said the MVNO market in South Africa remains a “massive opportunity” because the concept aligns well with many companies’ strategies.
Also in Tuesday’s media briefing, Mendes said:
- Cell C is focusing more attention on its post-paid contract business, which has in recent years been owned and managed by shareholder Blue Label Telecoms and its subsidiary, Comm Equipment Company (CEC). According to Mendes, Cell C plans to take back that book from CEC, without providing details of how the transaction would work.
- The company is within two to three months of launching commercial 5G propositions. Mendes confirmed it has reached an agreement with network partner Vodacom in this regard, while talks with MTN are ongoing.
- It is also poised to launched VoLTE – or voice over LTE – through its partnership with Vodacom, which will provide “additional efficiencies in the way we carry traffic”.
- Cell C is ramping up its focus on enterprise services, where it will work through partners to provide technology and communications solutions to businesses. It has signed up about 40 partners with whom it will work in a channel-focused approach to this market segment.
- Cell C and Blue Label will consolidate their financial results once the latter has been cleared by regulators to take control of the former by increasing its stake to about 53.5% from its current 49.5%. – © 2025 NewsCentral Media
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