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Home Business Telecoms

Unlocking Affordable Connectivity with Mobile Virtual Network Operators

by Techeconomy
February 5, 2025
in Telecoms
0
MVNOs in Nigeria
MVNOs in Nigeria | South Africa

MVNOs in Nigeria | South Africa

UBA
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Craig Palmer - VAS-X CEO
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Craig Palmer – VAS-X CEO

As major telcos jostle for dominance, the role of mobile virtual networks has been largely overlooked – and yet they hold the key to increasing competition and bridging the connectivity gap for underserved communities.

Mobile virtual network operators (MVNOs) sell mobile services to consumers while piggybacking on another company’s network infrastructure. Because they don’t have to build and operate their own infrastructure, they’re able to customise their offering to bring affordable, tailored deals to consumers.

This is particularly attractive for brands who already have strong customer bases and want to build closer relationships.

Often, they partner with mobile virtual network enablers (MVNEs) who provide the virtual network capabilities while MVNOs focus on sales, collections, and customer care.

Globally, the MVNO market was valued at over US$78 billion in 2023, and is expected to reach almost US$140 billion by 2030. We are seeing telcos, tech, and traditional industries all converging to offer an ecosystem of services customised for their consumers, founded on mobile.

Banking upstart Capitec, for instance, has now over a million customers on its own mobile virtual network, Capitec Connect, using Cell C’s infrastructure, and is actively growing its products and services. Currently, Capitec clients spend more than R2-billion a month in airtime from South African mobile network operators, and Capitec sees an opportunity to capture some of that spend.

Similarly, Standard Bank Mobile is a virtual network on Cell C and MTN’s infrastructure and offers Standard Bank customers airtime to the value of their monthly banking fees.

Retail brands are getting in on the act too. Pick n Pay is expanding its Smart Shopper customer loyalty programme to include airtime on its PnP Mobile network, while Shoprite and Mr Price also have their own established networks. In addition, internet service providers (ISPs) are also moving into the MVNO space.

In all these arrangements, consumers are the winners. They’re able to cash in on loyalty rewards, access lower prices on data and airtime, and stretch their money further – a real good news story in a time of high inflation and global uncertainty.

And yet MVNOs have often stumbled in entering the South African market. Lycamobile, one of the world’s biggest MVNOs, shuttered local operations last year as their product proposition wasn’t applicable here. Virgin Mobile, also a highly recognisable brand, was also unable to attract a viable customer base.

MVNO success depends on leveraging an existing customer base with whom they already have a billing or credit relationship and preferably a loyalty program as well. Innovation and marketing is key in differentiating themselves from traditional mobile networks – and doing this often means bringing in the right support partners and systems.

The Operational Support System and Business Support System (OSS/BSS) is a software application that helps MVNOs to manage their billing, provisioning, third party interfaces and customer services.

To compete with traditional operators, MVNOs need a billing and CRM solution to manage subscribers, invoicing, and provide a 360-degree customer view, across multiple services. The problem is that traditional mobile operators’ OSS/BSS solutions are too costly for most MVNOs.

MVNOs need to be able to scale effectively while retaining their agility, and this scalability depends on an OSS/BSS system that’s up for the job.

MVNOs need to look for suppliers with cost-effective services who offer converged billing and can provide flexibility to scale up as customer bases grow. Ideally, customers should receive a single invoice across multiple services, for ease and transparency.

Providing connectivity to underserved communities is in everyone’s best interest. With the right infrastructure in place, we can keep this pipeline sustainable.

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