Vodacom is building a platform for MVNOs

Vodacom South Africa is building a platform to support mobile virtual network operators (MVNOs) and expects to launch this soon after the conclusion of the spectrum auction next March.

Supporting MVNOs – these are companies that use other networks’ infrastructure to launch their own-branded mobile offerings – is a requirement of the invitation to apply for radio frequency spectrum published by communications regulator Icasa.

In an interview with TechCentral on Monday, Vodacom Group CEO Shameel Joosub said the operator has a team actively building a platform to support MVNOs. “We will have an MVNE (mobile virtual network enablement) platform available and we will have services to support them,” he said. “It shouldn’t take too long. Hopefully after the spectrum auction we’ll be ready to launch. Already, if you want to be an MVNO, you are welcome to approach us.”

However, Joosub cautioned that the requirement by Icasa that operators that successfully bid for spectrum in the auction support MVNOs could backfire on the planned wholesale open-access network (Woan). This is because the Woan – which will receive spectrum outside the spectrum auction – may need MVNOs’ business to be successful.

The Woan is a government construct, which will have private investors, meant to increase infrastructure competition in the mobile market. It will receive regulatory support, including cheaper access to spectrum and guaranteed offtake agreements with the big operators.

However, by requiring Vodacom and other successful spectrum bidders to launch platforms that support MVNOs, the Woan could be hobbled, said Joosub.

Careful thought

“If you get the MVNOs well settled into the market before the Woan (is launched), that creates its own dynamics of who the Woan is going to sell to. This needs to be carefully thought through,” he said.

He added that Vodacom is “happy” to support MVNOs. Historically, both Vodacom and rival MTN have steered away from offer services to MVNOs, leaving the market to their smaller rival, Cell C.

“What’s important for MVNOs is ensuring they have a credible proposition to take to market,” said Joosub. “Part of that is defining what is their distribution mechanism, what is their reach, what is their differentiated customer proposition. To the extent that you can create a compelling proposition, you have more chances of success.”

Last month, MTN South Africa said it had launched an MVNO platform. “We expect the number of MVNO subscribers across the country to double over the next five years, with several large players introducing offerings,” MTN said at the time.

“MTN is excited to be an enabler of this further growth path by putting our network capacity to work, as the rapid pace of digital change requires more agile and tailored solutions so that more people can benefit,” said Quintus de Beer, acting executive for managed network services, in a statement.

Ironically, the launch of these new MVNO platforms comes as South Africa’s first virtual network operator, Virgin Mobile, which was launched about 15 years ago, struggles to survive.

TechCentral reported earlier this month that Virgin Mobile South Africa had been placed into voluntary business rescue. The company’s CEO, Zak van de Merwe, said it had become necessary to seek business rescue to restructure the company and stave off collapse. He blamed the impact of Covid-19 and the lockdown for the need for the business rescue process, which is a form of bankruptcy protection. – © 2020 NewsCentral Media