This article breaks down the 10 most important trends and tactics MVNOs in the African market need to be aware of in order to succeed in 2025, as discussed at the MVNO Nation Africa event in 2024.
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The first annual MVNO Nation Africa event took place in Cape Town in July 2024. The two-day conference was a huge success, bringing together 250 experts from the telecoms sector to discuss the most prominent trends and effective strategies driving MVNO growth right now.
At the event, attendees learned that the global MVNO market is expected to grow with a CAGR of 6.62% between now and 2032. These projections are even higher for the continent of Africa at 6.75% and 7.80% for South Africa by 2029
So, while the MVNO market in Africa is still young, it’s developing fast, and there are great opportunities for ambitious businesses to make an impact.
What do those opportunities look like in numbers?
The continent has around 800 million active mobile SIMs right now, but only a small fraction of those come from MVNOs.
There are 1.4 billion people on the continent, and more than 90% of them still don't have access to MVNOs.
African MVNO subscribers reached 10.6 million at the end 2023, which is only 0.8% of the total African mobile market share. In comparison, across the rest of the world, subscribers reached 384 million by the end of 2023, which is 5.2% of the global mobile market share.
Clearly, there’s huge potential, but tapping into that is proving challenging.
Jignesh Dave, Founder and CEO of Next Communications, said, “Less than 3% of MVNOs make it to the contract signing stage. The reality is that 97% of MVNOs are unable to progress past those early stages. Of the 3% that do, 70% of them reportedly fail after three years.”
Of course, succeeding as an MVNO in Africa will not only require an intelligent commercial and technical strategy, but it will also require an intimate understanding of local consumer needs specific to the continent.
This article will help MVNOs in Africa navigate those challenges by sharing the top 10 trends and pieces of strategic advice from the MVNO Nation Africa event.
1. Don’t try to become an MVNO just to make money
A prominent theme across the event was the importance of having a clear purpose for entering the MVNO space, beyond just the financial rewards. This purpose should align with your company’s mission and goals, and focus on providing unique value to your customers.
For example, Standard Bank launched its MNVO business because connecting people supported the company’s mission of driving growth for Africa.
Kartik Mistry, Head of Standard Bank Connect, said, “Africa is our home, and we drive her growth. This is the passion behind our organisation. If you think about growth, it includes the growth of individuals, through their access to data and technology, which is a key component of driving Africa's growth.”
If you’re going to pursue the opportunities of becoming an MVNO, ensure you’re doing it for the right reasons, and take a customer-first approach.
2. Understand your target audience, including local cultural needs and conventions
For MVNOs in Africa, deciding which ideas to pursue and which services to offer is a common early hurdle.
The key is to first understand how your target audience’s needs align with your business’s existing capabilities, then build differentiated services and offers around that.
Strategically, this may involve looking at the needs of niche audiences, or specific cultural conventions across different locations on the continent.
Hymie Marnewick, CEO of NetEngage, explained, “If we look at the traditional banks who become an MVNO, for them it’s about customer retention. They want to create more value for their customers. So, if customers pay their bank fees monthly, they get that back in air-time or data bundles. That’s a good retention mechanism.”
“But if you’re targeting the East Africa corridor, for example, where the migrant workers are working away from home, for them, mobile financial services are key. They want to send the money home to their family. That's the right kind of value to be offering for those MVNOs.”
“So, before you dive into the actual service packages that you create, you have to really know your customer.”
For each MVNO, it’s critical to craft the right strategy based on your business goals and capabilities, and your target audience’s needs.
This will involve asking questions like:
What your brand stands for
Who your target audience is
What your target audience needs
How you can provide it to them.
3. Don’t underestimate the complexity of the telecoms sector
Many of the event speakers agreed one of the biggest mistakes brands make when becoming an MVNO is underestimating the complexity of the telecoms business model, and the telecoms sector overall.
Len Pienaar, former CEO of FNB MVNO, FNB Connect, gave some insight into this during a panel discussion with experts from Tauspace, Vodacom, Cell C, and more.
Len launched the first and largest MVNO in Africa. Crucial to his success was his ability to work through the cultural differences between the banking industry and telecoms. Coming into the telco space from an entirely different sector, like finance or retail, can often be a big challenge for new MVNOs, but Len got through this by aligning the two cultures.
Critical priorities like technology, billing, customer service, and more are all very distinct in the telecoms industry. It’s wise to work with experienced partners for help in navigating these complexities. Taking on the technical side of things without the support of specialists can be costly for non-technical MVNOs.
Jignesh Dave added, “A problem new MVNOs face is that either by default, or by design, they’re not allowed to focus on what they should be focusing on initially. That’s creating a strong value proposition, creating distribution channels, and creating niche communities.”
“But most of the time, what happens is they get distracted by technical things like their OSS or BSS, but that's not their domain.”
When coming from a retail or banking environment, don’t underestimate how difficult it can be adapting to the cultural nuances of telecoms without support from specialist partners.
4. Start with a clear plan and strategic roadmap
Whether you’re a new brand launching as an MVNO, or an existing brand entering the MVNO space, you must have a clear plan and strategic roadmap before you begin.
For businesses looking to build a new brand and attract customers from scratch – Andre Wills, Managing Director of Africa Analysis Team, South Africa, suggested customer service should be a top priority.
He said, “You need to build your brand based on delivering an extraordinary service that helps a specific segment and delivers great value to those customers. Focus on customisation and personalisation for your customers, and provide them with the best service offering possible.”
For brands that are already established with an existing customer base – Andre advised integrating MVNO services into your wider offering as added value for your customers.
Aligning MVNO services with your wider sales strategy can leverage your existing customer loyalty, which you can build on to ensure your MVNO offering gains traction. This could be using data or airtime as a reward for loyal customers, for example.
Whatever approach you take, it’s important to play to your strengths, according to Kartik Mistry. Kartik advised businesses to first understand what core capabilities they can leverage and build on to attract MVNO customers.
For example, Standard Bank was well positioned to capitalise on the opportunities offered by an MVNO, due to their existing, trusted brand, large customer base, core capabilities of payments and other financial services, and a wide distribution network, among other things.
5. Focus on developing a strong, differentiated customer value proposition
A point made repeatedly by many speakers at the event was that MVNOs must be laser-focused on creating a strong, differentiated, and compelling customer value proposition.
This links back to the previous points, because the customer’s needs should always be at the heart of your value proposition. Another important step in crafting your value proposition is identifying the existing capabilities and resources within your business, then leveraging those to strengthen your MVNO offering, as Kartik explained.
Yaron Assabi, Founder of MVNE, said, “Once you identify your target customers, start looking for things you can do that could be unique, that nobody else would be able to do in the market. Use your existing assets to find ways to deliver on your customers’ needs.”
Crucial to this will be personalisation and customisation. Ensure your value proposition and your service offering are highly targeted and tailored to your customers. Personalised service offerings are so important for MVNOs in attracting and retaining customers.
6. Do not compete with operators on price
If you’re running an MVNO, it can be a harmful mistake to try to compete with mobile network operators (MNOs) on pricing.
Andre Wills said, “You cannot be an MVNO trying to compete with the MNOs, as you’re probably going to lose. You can never compete head-to-head on pricing, so you need to have something more.”
“There’s two dimensions to that. Either you allow your customer to structure their package how they want to, and decide how much data, how many minutes, for example. Or you bring in additional services.”
For African MVNOs, Andre suggested those additional services could involve offering customers payment mechanisms for pre-paid electricity, pre-paid water, ticketing, gaming, or various other ideas.
Andre added, “When we look at some of the more successful MVNOs that have launched recently, they’re not just a pure-play telecoms offering. The attraction for their customers is the bundle of services, not just a telecommunication service itself.”
Valde Ferradaz, CEO of MVN-X, agreed with the warning about pricing, saying, “You must avoid competing with MNOs on price, because this is rarely successful for MVNOs.”
7. Work with experienced partners to fill gaps in your knowledge, capabilities, and infrastructure
As mentioned earlier, partners are often necessary for MVNOS navigating the complexities and cultural differences of the telecoms sector. But there are a wide range of other areas in which MVNOs will benefit from the support of experienced specialists.
Andre Wills said, “As an MVNO, you want to focus on what you do best, namely servicing your customers. Partnerships allow you to do that and ensure you minimise risk of failure in more technical areas.”
Partnerships with both MNOs and mobile virtual network enablers (MVNEs) can fill critical gaps in your knowledge, capabilities, and infrastructure. Don’t overlook the value that can deliver to your business.
This was another prominent theme across the event.
For example, partnering with an MVNE can provide an MVNO with:
Strategic and commercial guidance
Operational efficiency
Fast time-to-market
Technical support
Risk mitigation
Scalability
And more.
Yaron Assabi said, “If telco is not your core business, you shouldn’t really be doing it alone. For example, a lot of our MVNO customers have realised after their launch that, actually, they don't want to do the telco contact centre themselves, because it’s so different from their own existing customer service.”
“You've got to make sure your people, processes, and technology balance is really good if you’re going to make it as an MVNO. So, I think strong relationships with your MNO and an MVNE will make you more likely to succeed.”
But it’s important to remember the cultural differences between industries that were discussed earlier may need to be managed between partners as well.
Kartik Mistry said, “You have a way of working and your partners have a way of working. You have to find a middle ground.”
“When there's a shared vision for what you're trying to achieve, and why you're trying to achieve it, that’s when it works. So, with partners, make sure there's alignment between cultures, people, and shared goals, and then I think you'll be okay.”
8. Remain as agile and flexible as possible
If you want to be successful as an MVNO, you’ll need to take full advantage of the unique agility and flexibility available to you.
Agility is one of the biggest advantages of the MVNO business model, as it allows rapid response to market changes, competitor actions, and customer needs.
Yaron Assabi explained, “If I go to one of the big operators in South Africa and ask them to do something unique, it could take between 18 to 24 months to get it to market because of the complexity involved. But with that same idea, I think an MVNO could be in the market within a week or two, so that's a huge differentiation.”
“You want to be able to get to market quickly. MVNOs can do it, and should be doing it, and should be reinventing themselves all the time based on customer feedback and changing trends.”
This ability to continuously evolve your service offering, and innovate with new ideas quickly, is where many MVNOs will find strategic leverage and competitive advantages.
But agility also means remaining carrier and network-agnostic, according to Valde Ferradaz.
Valde said, “We believe you should be carrier-agnostic if you’re an MVNO. Not just network-agnostic, but the carrier as well. If you can work with multiple operators, remaining carrier and network-agnostic, it’s very beneficial because you can then leverage pricing and leverage one strategic roadmap versus the other.”
Additionally, Hymie Marnewick suggested being flexible with packages and deals is also a great way to attract and retain more customers. MVNOs can differentiate by offering flexibility with their services, allowing customers to choose the packages they want.
That creates an advantage over MNOs who only provide voice and data as a bundle. Hymie suggested that allowing customers to choose exactly what they want from their subscriptions could enable agile MVNOs to capture more of the market.
9. Prioritise providing an exceptional, seamless customer experience
Yaron Assabi, among others, highlighted the importance of exceptional customer service and customer experience as an essential factor for MVNO success.
He said, “Obviously, you want to deliver an exceptional customer experience, as this is a critical success factor for any business. But for MVNOs, it’s an opportunity, because sometimes with MNOs, you find they've got so many clients that customer experience isn’t always that great.”
According to Yaron, achieving this involves:
Data-driven personalisation of services, communications, and offers
Enhanced customer support channels and self-service
Interactive engagement and community building.
An example of that could be providing customers a self-service mobile app that allows them to manage their accounts, track usage, and receive personalised offers and notifications all in one place.
Many of the event speakers and attendees agreed that the best chance of long-term success for an MVNO is focusing on providing the best possible customer experience and service.
As mentioned earlier, you should do everything you can to avoid becoming distracted by the complexity and technicalities of the telco space, and always remain focused on your customers.
10. Take a data-driven approach
Following from the last point, it’s important to be proactive, not just reactive, in serving your customers. This is just one of the many reasons MVNOs should take a data-driven approach with their strategy.
For example, using predictive analytics to anticipate market trends, analyse and meet customer needs, or anticipate problems before they have an impact on your customers.
A data-driven approach is a major benefit for MVNOs, not only in delivering excellent customer service but also for personalised marketing and improved audience engagement.
Data analytics tools can be used to continuously refine service offerings, leveraging real-time data to tailor your value proposition, pricing models, and marketing to your specific customers.
Yaron Assabi said, “If you’re a retailer, for example, you can tell through your data when an MVNO customer is near your store. You could then build a geolocation service to notify that customer via their app about special offers available in the store when they’re within a certain range.”
“That drives more customers into your retail store, but it also provides the customer with a highly personalised, contextual experience that is positive for them too.”
Mark Prudhoe, Business Lead SaaS Connect for Amdocs, elaborated on the possibilities here.
Mark discussed how using AI to automate data analytics can take these capabilities further, as AI can analyse vast data sets at scale in an instant, and identify trends humans may not be able to recognise.
Mark said, “AI can unlock the full value of customer data, network data, interaction data, and product data. This enables MVNOs to gain more actionable customer insights, predict customer behaviour and preferences, optimise network performance and resource allocation, and spot new market opportunities.”
This will help you to understand your market and your customers better, and make more intelligent decisions across all aspects of your MVNO business.
Final thoughts
Clearly, there’s tremendous potential for MVNOs in Africa right now. By 2028, the African MVNO base could increase from 10.6 million to 28.9 million across eight MVNO markets.
However, you must carefully consider how to provide as much value as possible to your customers as an MVNO, to ensure you can acquire and retain enough customers to succeed.
If you’re going to attempt to become an MVNO, Yaron Assabi suggested you should think carefully about what that MVNO model can do to enhance every aspect of your business, including stakeholders, customers, core service offerings, internal operations, and everything else.
Want to discover the strategies that are currently driving growth for the world’s most successful MVNOs? Learn more here.