This is according to Andre Wills, MD at Africa Analysis , who was speaking at the launch of South Africas newest MVNO, C-Connect , in Johannesburg on Tuesday.
"MVNOs offer regulators the opportunity to allow new entrants into the mobile market at low cost since they don't have to bid for spectrum. But there is no licensing framework for MVNOs in South Africa, so they have a commercial standing but no legal standing," said Wills.
He said South Africa's MVNO market is relatively healthy. Africa Analysis data shows a total of 34 MVNOs have been launched in South Africa since the first one, Virgin Mobile, went live on Cell C's network in 2006. Eighteen of the 34 are still in existence.
According to Wills, the spectrum licensing conditions imposed by communications regulator Icasa on tier-1 operators such as Vodacom, MTN, Telkom, Cell C, Liquid Intelligent Technologies and Rain, which mandated that these operators support MVNOs on their networks, has been a driver of growth for the sector. Despite this, Vodacom, Telkom, Liquid and Rain are yet to host any MVNOs.
Cell C stands out among South Africa's network operators for its choosing to support MVNOs as part of its growth strategy, rather than as an attempt to meet regulatory requirements. As a consequence, a significant portion of the active users on Cell C's network are there through the various MVNOs which the operator supports. Wills said this is not unusual, with comparative data from Europe showing successful operators with more than 30% of their traffic driven by MVNO customers.
