Market Trends of South Africa MNO - MVNO Industry
This section covers the major market trends shaping the South Africa MNO - MVNO Market according to our research experts:
The Full MVNO Segment is Expected to Hold a Significant Share During the Forecast Period
- The major driver for the penetration of full MVNO in the country is the rolling out of 5G and increasing support from South African regulatory bodies. In recent years, a trend has been observed in the African region. Through the sale and leaseback agreements of mobile towers with tower companies, telcos are moving toward the asset-light or a mobile virtual network operator (MNVO) model. Airtel and MTN are the two major telco service providers leading the trend in Africa.
- In September 2022 - Due to a partnership between South African operator Cell C and Capitec, the latter is now the nation's newest MVNO. Capitec is the largest retail bank in South Africa, based on the number of customers (MVNO). With a focus on lower-income prepaid consumers, Capitec is advertising a virtual mobile network that offers customers less expensive, perpetual data.
- However, the full MVNO segment has faced slow growth in recent years due to unfair pricing for network access from large network operators. However, the competent authority in the region has ordered mobile network operators to reduce roaming fees, including those of MVNOs, which may drive the market.
- Cell C Limited is the only mobile network operator in South Africa to have opened its network to MVNO partners. It offers all the necessary support, expertise, infrastructure, and platforms to allow MVNOs to operate. The expansion of its offerings for the MVNO vendors may help the company gain a competitive edge over its competitor MNOs.
Understand The Key Trends Shaping This Market
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The Consumer Segment is Expected to Grow at a Significant Rate During the Forecast Period
- The increasing number of single mobile subscribers and increasing mobile penetration in emerging economies are the major factors fuelling the segment's growth. According to the GSM Association, in 2019, the share of smartphone connections in Sub-Saharan Africa was 45%, and it is expected to reach 67% by the end of 2025. This growth in Sub-Saharan Africa has been driven by the increasing smartphone penetration in South Africa.
- Traditionally, B2C, or the consumer segment, dominated over B2B in terms of innovation and pricing. Billing a wide range of devices and managing them is significantly more difficult than a simple consumer service. Due to convenience and more profit margins, MVNOs also prefer investing in the consumer segment.
- Tier 1 MNOs, like Vodacom and MTN, are being excluded from some 5G spectrum auctions to allow Tier 2 MNOs, like Telkom, Liquid Telecom, and Cell C, to have an equal chance. There are also plans to create a Wholesale Open Access Network (WOAN), which would use a 5G spectrum to create a wholesale network not owned by any existing MNO. Spectrum has been a major factor restraining the 5G rollout in South Africa. The competent regulator is yet to release the vital 3.5GHz spectrum to operators, implying that the rollouts will remain limited for the time being.
- Huawei continues to assist South Africa in developing its 5G network. With more than 2,800 base stations installed, Huawei is the most significant 5G network operating on the African continent. According to a recent report from a US-based broadband testing and diagnostics company Ookla, SA leads in Africa's 5G network. Ookla also added that Johannesburg, the center of the nation's economy, had the quickest median download speed among a limited group of cities on the continent.
- In South African cities, mobile phone companies like MTN, Rain, and Vodacom have set up 5G services, with MTN reportedly outpacing the competition in this region. By the end of the year, the mobile operator aims to provide 5G coverage for at least 25% of the population, according to a statement issued in June 2022. The delayed 5G auction was completed in March 2022 by the Independent Communications Authority of South Africa (ICASA), which sold spectrum in the 700MHz, 800MHz, 2.6GHz, and 3.5GHz bands.
