Rise of MVNOs in South Africa

South Africa’s mobile virtual network operator (MVNO) market has been flooded with new entrants over the past five years, with competitors believing there is still plenty of room for growth.

MVNOs are cellular service providers that don’t own network infrastructure and instead buy wholesale access from a mobile network operator to provide connectivity to their subscribers.

Cell C is South Africa’s largest enabler of MVNOs, even though it no longer operates its own radio access network.

The country’s first MVNO was Virgin Mobile, which began operating on Cell C’s network in 2006. However, it was shuttered in 2021, and what remained of the company was acquired by Huge Group.

Hello Mobile launched on Cell C’s network in 2010 and, with Virgin’s demise, has become the oldest South African MVNO still operating today.

Cell C dominated the mobile virtual network enabler (MVNE) space until MTN officially launched its wholesale product offering in 2020.

While MTN had allowed Afrihost and Axxess to offer MVNO services on its network several years earlier, this was not a generally available MVNE service.

In addition to offering wholesale services for MVNOs, MTN now builds and maintains Cell C’s radio access network for its prepaid and MVNO customers.

It has been 18 years since Virgin Mobile launched in South Africa, and while it isn’t around anymore, it blazed a trail that many more could follow. South Africa has seen at least ten new MVNOs in the past ten years.

A recent Analytico survey of 3,800 respondents found that Afrihost’s Air Mobile is the clear favourite MVNO among South African technology professionals.

When respondents were asked which MVNO they would use if they had to sign up today, Air Mobile received 38% of the votes.

The rest of the top four MVNOs are all run by banks and were partnered with Cell C. Standard Bank recently switched from using Cell C to MTN.

The chart below shows the results of Analytico’s brand popularity survey of the biggest MVNOs in South Africa.

Capitec Connect is currently regarded as South Africa’s largest MVNO after recently revealing that it had over one million active SIMs.

FNB Connect is not far behind, although it is much older, with 879,000 active SIMs in 2022 and a target of one million soon.

FNB Connect offers FNB clients discounted or free mobile services along with the eBucks reward program and believes increased competition benefits its business.

“I think the advent of more MVNOs and more competition has actually got customers thinking about what they are missing out on,” FNB Connect CEO Sashin Sookroo said.

“There has actually been more uptake on our side [than before other MVNOs launched].”

Cell C mirrors this belief that growth in the MVNO market doesn’t seem to be going anywhere.

“Cell C continues to see significant and growing interest from new MVNO clients,” Cell C’s chief officer of wholesale, Stephen Morony, said.

“This robust demand highlights the attractiveness of Cell C’s network and the overall health of the MVNO market, and the flexibility and comprehensive support Cell C offers.”

Looking ahead, Morony said Cell C’s key areas of focus in the MVNO space are retaining current business, fostering new opportunities, expanding service offerings, and building scalability to meet the space’s growing needs.

The table below shows the launch date of each major MVNO and its partner network.