Piggyback cell operators on the rise
South Africa has not been particularly keen on the mobile virtual network operator model. It has lagged most developed and some developing markets in launching mobile brands on the back of cellular operators' infrastructure. South African retailers and banks - the two industries internationally that mostly tend to launch mobile products - have not jumped on the bandwagon in the same way as their peers in the US, Europe and Asia.There are several reasons for this - and a few signs that the situation may finally be changing.One reason the market has been slow to open up is that MTN and Vodacom - South Africa's two largest mobile operators, with 90% revenue market share between them - have not been particularly enamoured of the idea of such operators, which typically want to attract customers with low prices.Another is that until very recently, the local mobile market was still growing strongly. But it is now fast maturing.To date only one operator - Cell C - has shown interest in hosting mobile virtual network operators on its network. It helped launched South Africa' s first such brand, Virgin Mobile, in 2006, and continues to court those interested in launching virtual mobile services.French telecoms giant Orange was interested in launching an operator here a few years ago. But it said that without regulatory frameworks of the sort that European regulators have imposed on Europe's network operators, it doesn't make sense to invest. And the Independent Communications Authority of South Africa has shown no interest in developing those regulations.Indeed, it took eight years from Virgin Mobile's launch before a second such operator emerged. In 2014, Mr Price launched MRP Mobile. That business was started with the help of former Virgin Mobile boss Steve Bailey, who now runs mobile virtual network enabler MVN-X, a subsidiary of Ignition Group. Like Virgin Mobile, MRP Mobile runs on Cell C's network. MVN-X provides the billing and customer management infrastructure.Then last year, MVN-X said Cape Town-based Smart Mobile, which specialises in providing cellular services and handsets to the emerging post-paid market, will also launch a mobile virtual network operator (again, using Cell C).And the company's latest partnership, announced this week, is an operator called me&you mobile, to be launched in early May by Ignition Group.Me&you CEO Brett Howell says the business will be a niche player, with no long- term contracts and competitive voice and data prices.Me&you mobile will operate online only, helping to keep costs low. Customers will order their services via its website, and the sim card will be couriered to them.The model makes sense, especially if you calculate how much it really costs to get a subsidised phone from one of the big mobile network operators on a 24-month contract.But the launch of these new and fairly niche players may just be the precursor to the launch of the big daddy of operators.FNB is widely rumoured to be on the verge of launching a mobile brand of its own, with Cell C again providing the underpinnings, that will give MTN and Vodacom a serious run for their money.Details are sketchy, but talk is that FNB's mobile service will be tightly integrated with its eBucks rewards programme.And if FNB enters the market, the other big banks surely won't be far behind.McLeod edits TechCentral.co.za. Find him on Twitter @mcleodd..
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