South Africa is on the cusp of a fresh wave of mobile virtual network operators, as spectrum liberalisation by the Independent Communications Authority of South Africa (ICASA) and MNOs being more wholesale-focused, lowers the barriers for new entrants. According to Mordor Intelligence’s South Africa MVNO Market report, the local MNO/MVNO market is now valued at USD 543.48 million.
Banks, retailers, insurers and a growing number of digital brands are all exploring mobile as a way to deepen customer relationships and unlock new revenue.
But Edward Wicks, Chief Commercial Officer at local MVNO enabler MVNE, says many of them are underestimating what it takes to keep one running.
“The promise of ‘MVNO in a box’ has made launching seem deceptively simple,” says Wicks. “What hasn’t really changed is the discipline it takes to make the business work commercially. That is where a lot of new entrants come unstuck.”
Many MVNOs fail within their first year, typically because they underestimate the commercial and operational reality behind the model. Before committing to the path, says Wicks, every organisation should be able to answer five questions.
- What problem are you solving for the customer?
Connectivity on its own isn’t a differentiator. South African consumers already have access to multiple networks, and they will only switch if the MVNO improves something tangible, whether that is pricing transparency, loyalty integration, or convenience inside an app or service they already use.
- Does the business case still work after launch?
Plenty of MVNOs look great on a slide deck. Then reality arrives. Wholesale costs rise, customer acquisition proves more expensive than budgeted, and churn starts to bite. If the economics only work under ideal conditions, they don’t really work at all.
- Are you choosing a partner, or just buying speed?
Plenty of providers can get an MVNO up and running quickly. That is no longer the hard part. The real test comes when the billing queries start arriving and something unexpected breaks. A platform will get you to launch day. After that, you are running an operating business, and you need a partner who is still in the room.
- Where does the MVNO actually sit inside the business?
This is where many MVNOs quietly lose their edge. On paper, it is part of the brand. In practice, it tends to operate in its own silo, using different systems and without the support of the parent business. Customers notice that almost immediately.
- What is the plan for keeping customers?
Getting customers in is one thing. Keeping them is where most MVNOs come undone. Pricing can win attention early on, but it rarely keeps it. If the experience is inconsistent, or the value fades after the first few months, customers simply leave. In this market, they have plenty of options.
“The conversation has moved on from ‘can we launch’ to ‘can we sustain and grow’,” says Wicks. “Execution, not just technology, has become the real differentiator.”
As more South African businesses enter the MVNO space, the distinction matters. The next phase will not be about who launches first, but about who can build lasting customer loyalty.