Mobile phone operator MTN, which is fighting to improve its local market share, has now become a mobile virtual network operator (MVNO), which allows it to onboard the increasing number of companies entering the cellphone service sector without owning a network infrastructure.
The company, which is Africa's largest mobile phone company, has over the years lost a significant market share to other domestic players such as Vodacom, and sees MVNOs as a viable tool to expand its digital ecosystem and potentially boost income.
The service, which has gained a foothold in the mobile space, allows entrants to uses the existing mobile network infrastructure provided by a network operator to carry its services. Notable virtual networks include Virgin Mobile, FNB Connect and Mr Price Mobile, which all use the Cell C infrastructure.
MTN in 2019 reported a dip in subscribers of some 300 000, and the company says the new service opens up an opportunity for it to explore bespoke projects through strategic approved partnerships, and "makes business sense" for the company.
"We expect MVNO subscribers across the country to double over the next five years, with several large players introducing offerings," said Quintus De Beer, Acting Executive for Managed Network Services at MTN.
So far, Cell C, which is the country's fourth largest cellphone company, has taken up a number of MVNO operators, with six service providers under its belt.
But according to technology analyst Arthur Goldstuck, Cell C, which is battling debt problems, has not taken full advantage of its MVNO platform as it battles for its own survival, while Vodacom has the advantage of being a dominant player and in not too focused on aggressively pursuing virtual mobile companies.
"Their [Vodacom] market share is a core differentiator, so the rest have to look elsewhere to differential themselves," he said.
Goldstuck said it was unlikely service would yield significant financial benefits for MTN in the short term, but could in the longer term "create a defensive strategy" for the company and unlock more subscribers.
During the public hearings this week by the Independent Communications Authority of South Africa (Icasa), to assess the state of mobile network in the country, Cell C stated that the competitiveness and cost structures of its relationship with MVNOs will depend on the services offered, like 5G and other input costs for voice and data usaged by its own national roaming providers.
Right now Cell C has a national roaming partnership with MTN.