South Africa MNO – MVNO Market – Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026)

Mordor Intelligence

The South African MNO – MVNO Market is Segmented by Deployment (Cloud and On-premise), Operational Mode (Reseller, Service Operator (MNO), Full MVNO, and Other Operational Modes), Subscriber (Enterprise and Consumer), and Application (Discount, Cellular M2M, Business, Media and Entertainment, Migrant, Retail, Roaming, and Telecom).

Market Overview

The South African MNO – MVNO market is expected to register a CAGR of about 7.8% during the forecast period (2021-2026). In an increasingly digital world and fragmented telecommunications industry, MVNOs are on the rise, applying emerging technologies, exploring new verticals, and providing value to both consumers and existing mobile network operators (MNOs). In recent years, competition in the South African MNO – MVNO market has shifted from pricing to value-added services and product differentiation, owing to the prominence of MNOs in the low-cost cellular services market in both developed and developing cities of South Africa.

• The growth of the South African MNO – MVNO market is expected to be attributed to the entry of new players and the roll-out of new services. Initially, the roll-out of 5G was delayed due to the government’s reluctance to allocate the radio frequency spectrum required for the mass-rollout of 5G. For instance, Vodacom and MTN have stated that they were about to launch large scale 5G networks during 2019 but have been restricted by a lack of access to the necessary radio frequency spectrum.
• However, in August 2019, the South African government promised a policy direction for 5G technology in 2020.
• The first licenses to mobile network operators (MNO) that will allow them to build large scale 5G cell phone networks in South Africa are expected to be released during 2020. Presently, many trials being conducted in the country with respect to the deployment of 5G technology, which would allow MVNOs to prosper in the country.
• However, most of the MNO and MVNOs leverage on the low-cost model to gain customers. There is a low-profit margin in this market because the vendors offer cheaper rates to consumers by renting spectrum from major carriers. MVNO players are functioning as wholesalers, who purchase bandwidth in chunks from the big carrier networks and sell at a discount to consumers. This factor is expected to impede the growth of the market throughout the forecast period.
• To ensure business continuity owing to the COVID-19 outbreak, business organizations, especially in highly affected states of South Africa, are allowing their employees to work from home (WFH). The increase in people working from home has led to an increase in demand for downloading, online video viewing, and communication through video conferencing, all of which are leading to increased network traffic and data usage.
• Generally, customers cannot complete a ring when they are on zero credit balance, that applies to a significant number of South African population at various times of the day or month, which is expected to be the scenario to even more people as a result of the COVID-19 crisis. In April 2020, Cell C Limited and Starlogik alliance had launched “StarCALL,” which is a free ping service for customers with zero credit balance. The solution will help millions of African customers to be connected at the time of critical situations.

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