In “Africa: A fertile ground for MVNO deployment”, Cartesian’s Mike Greening, Vice President, writes about the market opportunities, challenges and key considerations of the MVNO market in Africa

Excerpts from the Special Report:

On the current African MVNO market…

“The MVNO market across Africa is currently small, estimated at less than 0.5% of overall subscribers across the region. However, in recent months, there has been a scurry of activity with the launch of the Equity Bank, an MVNO in Kenya, and the announcement of further MVNO entrants both in Kenya and South Africa. Several national regulatory authorities (NRAs) in North Africa are also gearing their markets for launch with the issue of MVNO licences currently under way. With that said, few operators and new entrants to date have capitalised on the MVNO opportunity, with progress remaining slow across the continent both in terms of number of MVNOs and subscriber market share.”

On which MVNO model…

“Whether pursuing the traditional wholesale based MVNO model, branded partnerships or sub-brands, the concept of working with wholesale and retail brands is being seriously considered by increasing numbers of MNOs across the region. Cell C (South Africa) and Airtel (Kenya) are currently the two stand-out operators in the region that are hosting partner brands on their network.”

On MVNO Opportunities…

“With subscriber growth slowing across many markets, the use of partners to drive focused acquisition will become a more interesting option for many MNOs. We see numerous market opportunities, with the early successes likely to come from banking, postal, retail, youth and migrant segments. Several banks are rumoured to be evaluating the opportunity or close to launch, with Equity being the first to market in partnership with Airtel in Kenya.”

On Enablers…

“A wide range of MVNE solutions now exist, allowing operators to lower upfront investment, serving MVNO customers on a “pay-as-you-grow” basis.”

On MVNO Challenges…

“Regulation continues to be the one of the biggest headaches for MNOs or new entrants seeking to launch MVNO-based services. The lack of regulatory guidance across the continent is deterring many would-be entrants with clear policy and protection needing to be in place before investors are willing to commit funding to their MVNO initiatives.”

On key considerations…

“Operators need to clearly define the justification for pursuing MVNO, as well as select the appropriate MVNO model or combination of models appropriate to their situation…Also what works in one country may not work for another. Business models, propositions, brand and customer segmentation will need to be modified by market.”

To read more, the full report is available to subscribers to Telecom Finance

To discuss opportunities in MVNO and Cartesian’s expertise in this area, contact Mike Greening.