New mobile network era in South Africa

Given the increase in the number of mobile operators offering services to the public, South Africa is entering a new era of network competition that has the potential to significantly lower data prices.

Cell C CTO Schalk Visser highlighted this in a recent MyBroadband interview, noting the country’s mobile services market shift.

He said that because of the size of Vodacom and MTN, keeping up with their investment in tower infrastructure was impossible for Cell C.

Cell C decided to sell all of its towers and lease capacity from the networks that could afford to invest billions into capital expenditure.

“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 has 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.

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.

MVNO boom in South Africa

Virgin Mobile, which leased network capacity from Cell C, was the first MVNO to launch in South Africa in 2006, but pulled out of the country in 2021.

It took some time after Virgin’s launch in South Africa for the next few MVNOs to pop up, with another six launching over the span of ten years.

However, MVNO launches picked up towards the end of the 2010s, with ten MVNOs launching between 2015 and 2023.

This also saw banks jump on the bandwagon after FNB partnered with Cell C in 2015. It added MTN as a wholesale partner in June 2023.

Standard Bank Mobile launched in 2018, followed by Capitec Connect in 2022. Supermarkets also joined in with Pick n Pay Mobile and Shoprite K’nect. There are currently 23 MVNOs in South Africa.

This is a significant increase in service offerings from when the country only had a handful of MVNOs and Telkom, Cell C, Vodacom, MTN, and Rain.

MVNOs were pointed to as the product with the most positive sentiment offered by banks at the end of 2024.

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.

“People tend to think that MVNOs are merely disruptive competitors to the mobile operators,” said BMIT managing director Chris Geerdts.

“While they do compete, one must also think of MVNOs as strategic partnerships intended to better leverage the spectrum and network infrastructure that the operators have built.”

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

MTN and Cell C’s success in selling wholesale access has lured other operators to lease network capacity to MVNOs.

Vodacom signed Mr Price Mobile in September last year — its first MVNO customer since the collapse of Crystal Web years ago. Telkom launched its MVNO platform in March this year.