By Craig Palmer, CEO of VAS-X
In the competitive landscape of telecommunications, the significance of Mobile Virtual Network Operators (MVNOs) is often underestimated. However, these entities are crucial for fostering competition and addressing the connectivity needs of underserved communities.
MVNOs operate by offering mobile services to consumers while utilizing the infrastructure of established telecom companies. This model allows them to avoid the heavy costs associated with building and maintaining their own networks, enabling them to craft affordable and tailored service offerings that resonate with consumers.
This approach is particularly appealing to brands with established customer bases looking to deepen their engagement. By partnering with Mobile Virtual Network Enablers (MVNEs), MVNOs can focus on sales, customer care, and collections while benefiting from the technical capabilities provided by these enablers.
The global MVNO market, valued at over $78 billion in 2023, is projected to grow to nearly $140 billion by 2030. This growth reflects a convergence of telecommunications, technology, and traditional industries, all aiming to create a comprehensive ecosystem of mobile services tailored to consumer needs.
Take Capitec, for example. With over a million customers on its mobile network, Capitec Connect, leveraging Cell C's infrastructure, the bank is actively expanding its range of products and services. Capitec customers currently spend over R2 billion monthly on airtime from South African mobile operators, and the bank is keen to capture a portion of that expenditure.
Similarly, Standard Bank Mobile, operating on Cell C and MTN's infrastructure, provides airtime equivalent to its customers' monthly banking fees. Retail giants like Pick n Pay are also entering the fray, integrating airtime into their Smart Shopper loyalty program through the PnP Mobile network, while Shoprite and Mr Price have established their own networks. Even internet service providers (ISPs) are venturing into the MVNO domain.
These developments ultimately benefit consumers, who gain access to loyalty rewards, competitive pricing on data and airtime, and greater value for their money—especially crucial during times of high inflation and economic uncertainty.
Despite these advantages, some MVNOs have faced challenges in the South African market. For instance, Lycamobile, a prominent global MVNO, ceased local operations last year due to an unsuitable product offering. Virgin Mobile, despite its strong brand recognition, also struggled to cultivate a viable customer base.
Success for MVNOs hinges on effectively leveraging an existing customer base with established billing or credit relationships, ideally complemented by a loyalty program. Innovation and strategic marketing are essential for distinguishing themselves from traditional mobile networks, often requiring the right support partners and systems.
Operational Support Systems (OSS) and Business Support Systems (BSS) play a pivotal role in helping MVNOs manage billing, provisioning, customer service, and third-party interfaces. To effectively compete with traditional operators, MVNOs must implement robust billing and CRM solutions that provide a comprehensive view of their customers across various services.
Unfortunately, the OSS/BSS solutions available from traditional operators can be prohibitively expensive for many MVNOs. To thrive, MVNOs must find cost-effective suppliers that offer converged billing solutions, allowing them to scale while maintaining agility. Ideally, consumers should receive a single invoice for multiple services, enhancing ease of use and transparency.
Ultimately, enhancing connectivity for underserved communities is a collective responsibility. By establishing the right infrastructure and support systems, the sustainability of this vital pipeline can be assured.
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