First Telkom mobile virtual network operator is near

Telkom has told the Parliamentary Portfolio Committee on Communications that it is close to onboarding a mobile virtual network operator (MVNO).

The partially state-owned telco operator explained that to meet obligations attached to its radio frequency spectrum licences it must have an MVNO with 51% shareholding by historically disadvantaged groups.

In its presentation to the committee, Telkom said it has submitted its business plan to onboard such an MVNO.

“We are currently engaged in a number of discussions with potential MVNOs and are looking to onboard an MVNO in the not-too-distant future,” said Telkom legal head Nozipho Mngomezulu.

Mngomezulu’s feedback comes after Telkom announced in March that it signed an agreement with a Mobile Virtual Network Enabler (MVNE) platform provider to enter the MVNO market.

Telkom did not disclose the MVNE’s name but said it had a proven track record in the South African market.

It said the partnership would enable the identification and onboarding of multiple MVNOs to strengthen its competitive position in the market.

The Independent Communications Authority of South Africa (Icasa) requires mobile network operators like Telkom to support at least three black-owned MVNOs as part of their spectrum licence conditions.

South Africa’s MVNO market is expanding rapidly, with banks, insurance firms, and major retailers driving competition in the sector.

BMI-T’s 2024 MVNO Report said subscribers at virtual operators almost doubled from just over 2.5 million since 2022 to under 5 million last year. The firm projected that MVNO subscribers would grow to over 10 million by 2029.

The report’s lead author, Johan Nel, said he expected Cell C to continue to lead the MVNO market, while banks and financial institutions, such as FNB and Capitec, are expected to dominate in the segment.

With Telkom and Vodacom’s entry into the MVNO wholesale service market, healthy competition has emerged, which will help to drive market growth.

This is evident because many of the 23 MVNOs have switched operators or have adopted a multi-operator strategy.

MVNOs an opportunity for Telkom

Telkom’s CEO for consumer and small business, Lunga Siyo, said in March that MVNOs present a significant opportunity for the company.

“Since the sector’s inception in 2006, it has experienced steady growth, with subscriber numbers increasing by 51% year-on-year by the end of 2023, reaching 4.3 million users,” said Siyo.

He said this growth was driven by consumer affinity, particularly to financial services providers, retailers, and niche brands.

“These businesses seek to create unique branded mobile products and services, develop new value propositions and value-added services to enhance customer engagement for their own customers,” Siyo said.

“The MVNO market is an exciting space, and we are eager to bring our network capabilities and infrastructure to enable and support new entrants.”

Siyo said Telkom was streamlining MVNO entry with a structured, scalable single-platform model.

“This simplifies integration, reduces operational complexity, and ensures reliable network access,” he said.