Mobile virtual network operators (MVNOs) – companies that piggyback off the networks of mobile infrastructure providers – will double their market share in the next two to three years, according to a new report.
Technology research and consulting firm BMIT reckons in a new report on the MVNO sector that virtual operators – they include the likes of FNB and Capitec – will also eventually take between 10% and 12% of the market.
These are key findings contained in BMIT’s “2022 MVNO Report”.
The growth in the MVNO space will be driven mainly by banks and retailers, which have significant brand power to foster adoption of mobile services by their customers.
There is growing interest in corporate South Africa in launching MVNOs. The mobile operators, driven by requirements imposed on them by communications regulator Icasa in the recent spectrum auction, are also starting to open their networks to third-party players. For a long time, Cell C was the only enabler of MVNOs, but it has recently been joined by MTN and Vodacom.
Johan Nel, primary author of the BMIT 2022 MVNO Report, said: “Fundamental shifts happening rapidly in the mobile, retail, banking, IT and media sectors mean that the MVNO market is sitting at an inflection point”.
“We are seeing next-generation business models and strategic partnerships kicking into full gear, underscored by the rapid uptake of fintech by the mobile operators, banks and the retailers,” he said in a statement.
‘Strong position’
“It is clear that several of the existing and new MVNOs are in a strong position to grow market share and make communications and devices more affordable due to their market sizes and ability to attract share of customer spending.”
BMIT CEO Christopher Geerdts said large banks and retailers have entered the market and introduced “exciting crossover products to add greater value for customers”.
“We live in exciting times, when financial operators are becoming lifestyle companies, retailers are becoming banks and mobile operators are becoming digital technology companies,” Geerdts said.
“Most of the big-brand MVNOs are focused on below-the-line promotional initiatives. However, these early approaches are learning curves that will rapidly evolve towards more integrated value propositions and closer alignment with their own brands, segments, distribution footprints and loyalty programmes.”
The imminent entry of Vodacom will result in a race between the mobile operators to cement long-term, focused, strategic partnerships
“Mobile operators have realised this and made a fundamental shift to viewing MVNOs as strategic partners rather than as a disruptive element in the market,” Geerdts said.
BMIT said Cell C has about 75% of the MVNO market today, with MTN, a relatively new entrant in the space, already haven secured a 25% share.
“The imminent entry of Vodacom will result in a race between the mobile operators to cement long-term, focused, strategic partnerships, which will also extend into enterprise and SMME market segments, as well as ICT partners,” BMIT said. – © 2022 NewsCentral Media
