As Vodacom challenges a tightly-contested market, it needs focus, resources and positioning to compete for business.
Given the intense competition in South Africa’s mobile virtual network operator market, Vodacom must ensure its newly-launched mobile virtual network enabler has the correct focus, resources and positioning.
MTN signed its first MVNO partner − Afrihost Air Mobile − in 2013, before launching a fully-fledged MVNO enablement platform in 2020, in a space that had for many years been dominated by Cell C. While an MVNO strategy was crucial to Cell C's survival and growth, in terms of opening new channels of customer acquisition, Goldstuck points out it is simply an add-on service for Vodacom – which is already the largest operator in the country.
Typically, an MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently. “Vodacom's primary challenge will be determining how extensively it supports the MVNO model. This includes making decisions around wholesale pricing, network access and service quality for hosted MVNOs,” Wills states.“Given the increasing number of MVNOs, Vodacom will need to ensure it can balance the potential cannibalisation of its own market share, while supporting its MVNO partners.
One factor forcing some network operators to venture into the MVNO space is that the telecoms regulator − the Independent Communications Authority of South Africa − stipulates that winners of large spectrum blocks in the high-demand spectrum auction, such as Vodacom, are required to host MVNOs, Wills points out.
Vodacom Mr Price Mobile Mobile Virtual Network Enabler Cell C Afrihost Air Mobile MTN Arthur Goldstuck Andr'e Wills Africa Analysis Shenge Buthelezi
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