The future of mobile networks in South Africa

As the South African telecommunications sector becomes increasingly saturated and network infrastructure is optimised and shared, mobile virtual network operators (MVNOs) are poised for rapid growth.

This is according to MVN-X CEO Valde Ferradaz, who said that MVNOs are a natural extension that occur in typically saturated markets like South Africa.

MVN-X is a leading mobile virtual network enabler (MVNE) in South Africa, providing infrastructure services, business support systems, operational support, and more to MVNOs in the country.

“There is a clear need to unlock opportunities through MVNOs, who are well-positioned to provide added value and competitive offerings which will secure their share of wallet, drive loyalty, and increase brand trust,” Ferradaz said.

“As the networks start to open their wholesale platforms, more companies will start marketing data under their own brand names. Existing MVNOs have proven this works, and they are doing very well.”

Ferradaz told MyBroadband the reach of South African businesses into rural areas and the demand for basic telecommunications services in these areas could be a big driver for the growth of MVNOs locally.

“In these communities, where there is a significant distribution of basic commodities such as rice, fuel and water, companies should view their reach as an opportunity.”

“There is an essential need for access to basic services, and through MVNOs customers can be rewarded with a commodity that is absolutely essential in modern times,” Ferradaz said. “That commodity is data.”

“If businesses are able to make it easier, less expensive, and more convenient for their customers to acquire data, they would see a significant return.”

Ferradaz added there are clear indicators of substantial, anticipated growth in the South African market.

“MVN-X has experienced a surge of interest from businesses and operators alike, who have recognised the opportunity to connect their customer base by playing a role in the MVNO space.”

Sharing resources at scale

Ferradaz noted that mobile network infrastructure in South Africa is solid, with a large fibre backbone and world-class data centres.

“As an enabler, we have already begun to see network infrastructure optimisation consolidation, which is very positive,” he said. “The roaming agreements between the network operators are a clear indication that vital infrastructure is being shared.”

“This means the network operators can begin to significantly reduce infrastructure operating costs and the benefits of such, including better coverage, lower costs, and increased capacity can now be passed onto the consumer and business.”

“The expansion and consolidation of fibre and broadband networks in the country, as well the introduction of new technologies, such as satellite communications – which is a viable option to connect our remote areas – is going to make connectivity more affordable and continue to boost market reach and penetration.”

“Going forward, I anticipate that government, private enterprise and the telecom networks will shape the industry further around the needs of the economy and the consumer, and we are starting to see the beginnings of this unfolding particularly with regards to regulation,” he said.

He said that MVNOs, mobile network operators, and ICASA also need to work together to reduce data prices while maintaining the profitability of the sector in South Africa’s strained economy.

Ferradaz applauded the recent allocation of temporary spectrum, as well as the reduction in data prices implemented by local mobile operators, including MVNOs.

“The networks and significant MVNOs such as Standard Bank and FNB have done well in announcing the reduction in data prices as well as initiating data promotions and zero-rated data services,” he said.

“This demonstrates a trend and a need to support the consumer and business given the current stresses on the economy.”

“Together with the regulator engaging more with private enterprise and government to ensure an economical balance, these tactics demonstrate the pattern of sharing networks, resources, and synergies of scale,” Ferradaz said.

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The future of mobile networks in South Africa