Mobile virtual operator price war in South Africa

South Africa has several major mobile virtual network operators (MVNOs) offering excellent data and voice bundle prices, which often undercut the best offers from the main mobile networks.

The last few years have seen a surge in activity in the MVNO industry in South Africa.

Since the launch of MTN’s MVNO platform in 2020, five new providers have entered the market.

In addition, several who had only used Cell C’s platform also began using MTN’s service.

MVNOs don’t operate their own radio equipment but effectively lease capacity on mobile networks’ towers to sell cellular services.

That is similar to how Internet service providers package and sell fibre broadband products.

Many MVNOs are divisions or subsidiaries of larger companies like banks, grocery retailers, or clothing outlets.

By leveraging their parent company’s customer base, resources, products, and services, they can create curated connectivity offerings that might not necessarily prove profitable on their own but benefit the greater business.

One basic example is that a bank’s MVNO could offer zero-interest credit card deals or discounts on smartphones or other tech devices.

The bank can recoup the discount through the monthly credit card fee or interest on other purchases.

While MVNOs don’t generally share their customer numbers, the two biggest players in South Africa are likely Capitec Connect or FNB Connect, which are both part of large banks.

However, there are also some MVNOs — like Afrihost Air Mobile and Melon Mobile — that don’t require their customers to hold accounts or products with any other entity.

They can still offer among the best pricing for data bundles and voice minutes due to a lower overall operating cost, as they have less staff and don’t have to maintain the network themselves.

Below are six of the biggest or most well-known MVNOs in South Africa and summaries of their products.

Capitec Connect

Capitec Connect’s growth is particularly impressive as it only launched two years ago.

The MVNO recently revealed that it had over one million active SIMs.

Capitec Connect’s initial appeal was cheap out-of-bundle rates, which it marketed as non-expiring data.

This was great for customers with relatively low monthly usage. However, it meant that the effective cost-per-GB did not decrease as bundle sizes increased.

The MVNO subsequently launched several well-priced mobile data bundles, some of which are shown below.

FNB Connect

FNB Connect is nine years older than Capitec Connect and once held the position of South Africa’s biggest MVNO, with over 879,000 active SIMs by 2022.

At that point, FNB said it was targeting one million SIMs in the near future.

FNB Connect’s products include a wide range of smartphones and other devices available through its banking app’s store.

It recently introduced discounts in the form of eBucks returns on its device contracts, with up to 100% back in premiums for Private Wealth customers.

One of its standout mobile products is TalkMax, which provides unlimited voice minutes from R325 per month, provided subscribers meet certain conditions.

Below are some of FNB Connect’s latest offers for data TopUp contracts and Talk Max plans.

Afrihost Air Mobile

Well-known Internet service provider Afrihost made a splash in the mobile market when it launched the lowest 1GB monthly prepaid bundle in 2019, priced at R69.

It has continued to offer among the most competitive prepaid data prices while the big networks dropped their prices.

Its current R30 price for 1GB monthly and R150 for 10GB data are the cheapest monthly bundles with those allocations that are available to any South African mobile customer.

Air Mobile relaunched in early 2024 with a new app offering eSIM downloads and activations.

Standard Bank Mobile

Standard Bank Mobile previously focused primarily on device contracts for high-end smartphones, offering among the best monthly prices in the market.

It now offers seven plans starting from R59 per month for the Connected Circle Intro package, providing 1.5GB data and 10 voice minutes.

The four higher-end Connected Circle plans include unlimited calls to 1, 3, or 5 numbers, respectively.

The top-end Connected Gigs Pro plan boasts 20GB mobile data for R299 per month, working out to R14.50 per GB.

Shoprite K’Nect

Shoprite launched its K’Nect MVNO in March 2021, initially offering competitive out-of-bundle rates including 15c per MB for any bundle up to 1GB.

It also offered bonus airtime and allocations through its Xtra Savings rewards programme.

Shoprite K’Nect’s latest data pricing is highly competitive for all customers, but it gets better for Money Market account holders, who get a 50% discount on all bundles up to 2GB.

Melon Mobile

Another MVNO that has been making waves in the past year is Melon Mobile, founded by former Supersonic managing director Calvin Collett.

It was among the first to launch in-app prepaid eSIM activations, making it easy to join its service.

Melon Mobile’s crackdown on abusers of its unlimited calling plan led to some controversial decisions regarding itts fair usage policies (FUPs) and backlash from customers.

Nevertheless, there is no doubt that a starting price of R199 per month for 5GB and unlimited voice calls — albeit with the requirement to request a manual extension after reaching a certain consumption — is still among the best-value offerings in the market.