| By: Warren Alberts, chief executive officer at VAS-X
Not so long ago, launching a mobile virtual network operator (MVNO) was about disrupting the telecoms market.
The early entrants in this space saw an opportunity to offer consumers greater choice and lower prices without having to bear the cost of building a mobile network.
But today, the appeal of launching an MVNO is more about strengthening your core businesses. And when one looks at just how much the market has grown in recent years, it’s clear that everyone wants in.
Banks are bundling connectivity with financial services to gain fresh customer insights and to deepen customer relationships. Retailers are rewarding shoppers with free data. And insurers are embracing the MVNO model as a way to strengthen loyalty and unlock new revenue streams. According to a recent report from Africa Analysis, South Africa’s MVNO market is set to grow from 4.4 million active SIMs in 2025 to 14.4 million by 2030.
But as competition in the MVNO market heats up, how do existing and new entrants differentiate themselves? For a long time, the most obvious answer was to offer customers lower prices. But if every MVNO is trying to offer the lowest price, this strategy quickly becomes unsustainable.
And let’s not forget that switching mobile networks isn’t effortless. The admin alone means consumers need a very compelling reason to make the change, so marginally cheaper data or airtime is rarely enough.
Is the market overcrowded?
I recently attended MVNO Nation in Cape Town. In previous years, the interactions were very organic. If you had a stand at the event, people came up to you and had conversations and wanted to understand how the market works.
But this year there was none of that. I don’t think attendance at the event was poor and it was clearly a worthwhile gathering, but it struck me that the excitement I’ve experienced in previous years about what’s happening in this space wasn’t there.
I think this is largely because the market is now a little overcrowded. Just take a look at the banks – three of the four big banks have already established MVNOs.
The one outlier in this industry is in the process of launching its mobile offering soon. Similarly, our local retailers were some of the first non-telecom brands to recognise the strategic value of MVNOs, and today several major retail brands operate MVNOs.
Opportunities for growth
As the number of new MVNOs continues to grow, differentiation becomes increasingly difficult. But this doesn’t mean that there aren’t opportunities for growth. South Africa’s Internet of Things (IoT) market is expected to expand from $4.85 billion in 2026 to around $14.54 billion by 2030. As this market grows, so too does the need for connectivity that links machines rather than people.
Think worker safety wearables, vehicle trackers, soil moisture sensors, smart water and electricity meters and remote patient monitoring devices. Now, it’s not just humans needing SIMs; machines need to be connected too.
Consider a single top-tier vehicle tracking brand servicing around two million vehicles. If an MVNO launched to service a brand like this, they would already have a customer base of around two million SIMs. Sure, IoT SIMs generate much less revenue per SIM than consumer SIMs, but IoT is a business of scale.
A single mining company, smart city or vehicle tracking brand could require hundreds of thousands of connected devices, creating a stable, long-term revenue stream.
Additionally, MVNOs targeting the IoT market are not only offering connectivity, but they’re also providing device management, security and analytics. So the offering is broader than the SIM card alone.
If someone approached me today with grand plans to launch a greenfield MVNO, my advice would be simple: don’t do it. I believe the market opportunity is no longer compelling enough to justify the investment and risk, especially if you’re building something from scratch. The old “build it and they will come” mindset has already cost many ambitious entrants a great deal of money, and history suggests that simply launching another MVNO is not a strategy for success.
The market is already crowded with brands competing for the same subscribers. That being said, there are still compelling opportunities for those willing to look beyond traditional consumer connectivity. Right now, the real growth lies in low-data, high-scale markets where a single enterprise customer needs to connect a significant number of devices.
The business model might look a little different, but in my opinion, this is where the next wave of MVNO growth can be found.
