MTN South Africa is rebuilding the way it prices wholesale access for mobile virtual network operators and will now sell capacity more cheaply at deliberately lower quality, giving MVNOs a trade-off between price and performance they did not previously have.
CEO Ferdi Moolman told TechCentral in an interview that the old wholesale model priced almost nothing but volume. An MVNO agreed a price and a volume, paid a premium if it exceeded that volume, and received the same network quality as MTN’s own retail customers. Quality was never a variable in the calculation.
Under the new model, it is. An MVNO that wants to compete on aggressive retail pricing can buy access more cheaply, but with lower guaranteed throughput, and it is left to the MVNO to decide where on that curve it wants to sit. Moolman used a deliberately simplified illustration: capacity guaranteed at 20Mbit/s would cost less than capacity guaranteed at 100Mbit/s. Nobody needs 100Mbit/s all the time, he said.
The new model could evolve further to take account of geography – pricing structured to help an MVNO win customers in an area where its brand is strong and MTN’s penetration is weak.
Moolman has said before that MTN is moving to a more disciplined wholesale framework, warning that some MVNOs are treating telecommunications as a loss leader in a way that risks destroying value in the market. What he has not previously set out is the mechanism.
Wholesale makes obvious sense where an operator has spare capacity to fill, Moolman said, because that capacity is a sunk cost: an operator sitting on 30% or 40% spare capacity will take a lower yield to fill it.
Asked about margins, he disputed that wholesale is necessarily bad for them. The yield is lower, but so is the cost to serve: MTN deals with a single client rather than a retail base, spends nothing on marketing for those subscribers, and needs no call centre or service centre to support them.
Yield and the investment case
Moolman tied wholesale pricing directly to capital expenditure, and this is where the argument becomes politically awkward. He said coverage in rural South Africa is worse than he expected on returning to the country, and that 5G penetration is not where it should be. If wholesale yields fall too far, he suggested, the investment case could fall apart.
Moolman left South Africa around 2000 and worked outside the country until 2021, running MTN Nigeria for the last five of those years. He returned as MTN’s group chief risk officer and took the reins of the South African business in November last year.
By Moolman’s count there are about 30 MVNOs on MTN South Africa’s network, most of them invisible to the wider market. MTN opened its MVNO platform in 2020, and the MVNOs on it now include Pick n Pay Mobile, Afrihost Air Mobile and Melon Mobile.
Capitec Connect, which claims to be the country’s largest MVNO, sits on Cell C’s network rather than MTN’s – but Cell C in turn depends on MTN. MTN builds and operates a radio access network that runs on Cell C’s own spectrum and carries its prepaid and MVNO traffic, and in exchange MTN gets access to a portion of that spectrum, which it pools with its own. That arrangement is being renegotiated. – © 2026 NewsCentral Media
