“The home of MVNOs”

Cell C CEO Jorge Mendes has made clear the mobile network’s goal of becoming the go-to destination for companies looking to diversify into mobile virtual network operator (MVNO) services.

“We want to make sure that we are the home of MVNOs. So we are effectively the network of networks,” Mendes said during a media briefing on Tuesday.

“We’d like to be the first choice for an MVNO partnership to personalise these deals.”

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

While it may seem as though Cell C is an MVNO by definition, albeit one that also enables other MVNOs, it has its own radio frequency spectrum, which sets it apart from the rest.

Cell C no longer builds or maintains its own radio access network, but relies on wholesale deals with MTN and Vodacom for cellular coverage.

MTN operates a “virtual radio access network” allowing Cell C to offer services using its own spectrum, whereas Cell C’s deal with Vodacom is a more traditional roaming arrangement.

By some definitions, Cell C would be considered a “full MVNO” (with its own spectrum), which provides enabling services to “light MVNOs” like Capitec Connect.

Regardless, the strategy has paid dividends for Cell C, as its network quality has improved dramatically in the past year.

Mendes said that Cell C offers several MVNO models that it can use to ensure that businesses can “go after a particular target segment.” These include hosted, non-hosted, and direct models.

He added that he hopes this will allow its partners to serve customers that Cell C, as an operator, might not have been able to do as adequately.

The CEO provided the analogy of making Cell C services available to customers. However, if they preferred Capitec Connect as a service, that partnership is also a revenue stream.

Therefore, when discussing Cell C’s MVNO business model, Mendes emphasised the operator’s partnerships. This was also the case for its enterprise business.

“We want to unlock quite a lot of the revenue generation through partnerships,” Mendes said.

“We won’t have a large direct sales force, but key account management with partnerships. We’ve onboarded north of 40 partners already, both in the private and public sectors.”

Regarding its Internet of Things (IoT) offering, Mendes believes Cell C is particularly well-positioned, given its Multi-Operator Core Network (MOCN) roaming agreements.

This lets them coordinate with each other regarding interference, backhaul, traffic prioritisation, individual user authentication, and quality of service parameters.

“If you take MOCN roaming with the Cell C SIM card and a particular network is down in that geography, it will automatically switch from Vodacom to MTN or MTN to Vodacom,” Mendes said.

“That is a key value proposition and differentiator that we are trying to unlock in every aspect of our business, not just through the MVNO propositions, but also for our direct prepaid and postpaid customers.”

Competing on the services front

Cell C CTO Schalk Visser recently told MyBroadband that keeping up with MTN and Vodacom’s tower infrastructure investments was impossible because of their size.

Therefore, the mobile network decided to sell its towers and lease capacity from networks that could afford to invest billions in capital expenditures.

“It’s just not possible for five mobile operators to spend R10 billion a year on capital expenditure in a country the size of South Africa,” Visser told MyBroadband.

“So it’s good that our partner networks keep investing while we compete on the services front to put the best quality and price in the hands of the customer.”

Cell C moved to a virtualised radio access network rather than a physical one, which allows it to focus on service delivery.

However, Cell C is not the only business that has taken advantage of this opportunity.

Mobile virtual network operators (MVNOs) like Capitec Connect, Afrihost Airmobile, and FNB Connect operate similarly. However, it is important to note that Capitec and FNB buy wholesale services from Cell C.

A recent BMIT report found that MVNO users nearly doubled from 2.5 million in 2022 to just under 5 million at the end of 2024.

The report’s lead author, Johan Nel, said that this number is expected to reach between 11 and 12 million by 2029.

A MyBroadband analysis from the beginning of April found that MVNOs offer the most affordable 1GB data bundles in South Africa, starting at R30.