Emerging Trends | Infrastructure | Network Management | Regulation
September 12, 2018

The opportunities of mobile virtual network operators (MVNOs) in Africa

By ITU News

As mobile virtual network operators (MVNOs) play an increasing role in the telecommunications industry, Africa is a key emerging market. ITU News spoke with Karmanie Govender , CEO and Founder of DTTech, about the opportunities for MVNOs in Africa and how they could benefit local populations. Ms. Govender spoke at “Rise of the MVNOs – Leveraging MVNOs in an ‘everything connected’ world” event at ITU Telecom World on 12 September in Durban, South Africa.

What are the key trends to watch in the MVNO industry?

Mobile virtual network operators (MVNOs) are embracing over-the-top (OTT) technology, which allows content providers to distribute media directly to consumers. An example is appMVNOs, WHICH ARE WHAT?

There has also been a convergence of the financial technology (FinTech) industry and MVNOs, WHICH MEANS WHAT IN PRACTICE?

‘MVNOs can help increase productivity, improve well-being and reduce poverty.’ – Karmanie Govender​, CEO and Founder of DTTech

In addition, there is increased smart phone penetration, which helps drive data revenue. More MVNOs and more mobile take-up results in mobile contributing to economic growth. HOW SO? COULD YOU PLEASE BRIEFLY EXPLAIN?

MVNOs also help enable the digital economy. For example, In Africa there is a focus on the rural areas and giving people access to services they haven’t had before, including cellular Internet of Things (IoT) technologies, mobile money, micro loans, and coverage of funeral costs. This becomes an ecosystem that delivers life-enhancing services

What are the benefits of Internet of Things (IoT) and e-payments to improving people’s lives?

Internet of Things (IoT) technologies create a roadmap for future sustainability.

For example, intelligent transportation can help reduce pollution and decrease traffic congestion. Smart agriculture can increase food production and improve water utilisation. Smart wearables with panic buttons or alerts for patients with chronic diseases can result in faster medical response times.

Rise of MVNOs

IoT is also creating an eco-system by which Smart Cities are being created. The vast amount of data available from even one person being connected on various devices is allowing organisations to better serve their consumers, increase revenue more quickly and become far more efficient.

Connecting e-payment to these ecosystems allows consumers to sign up and use the services at their convenience. E-payments also allow for better data collection, transparency, traceability and accountability.

For consumers, e-payments are faster, better, and more convenient than traditional payment systems. Consumers can save money on credit cards fees and have increased access to additional services.

For providers, e-payments offer consumer trends and analysis, as well as the ability to offer incentives, integrate additional services and provide an easy collection mechanism. They also help extend financial services to people with limited access to traditional financial institutions, particularly women and rural populations in Africa.

What are the opportunities for MVNOs in the African market?

Many African countries have state-owned telecommunications network operators with small market shares, meaning that there is an untapped market at present.

There are large market segments and populations that MVNOs could serve. For example, in Nigeria, there are many opportunities to target different market segments and offer services applicable to each segment, for instance large church groups. MVNOs can contribute to an increase in data use and access to online services for these markets.

There are also large amounts of informal trading and opportunities to enable a digital economy in Africa. By increasing connectivity and enabling people to easily access information and mobile services such as cellular IoT and mobile money, MVNOs can help increase productivity, improve well-being and reduce poverty.

What are the obstacles in this market and how might they be overcome?

MVNOs need to be clever when thinking about the acquisition strategy for African markets, as they will not be able to compete with operators in the traditional sales channels.

Challenges of country regulation can be overcome with demand for MVNO services and by working in a beneficial relationship with mobile network operators (MNOs) in each country.

Watch a video interview about MVNOs with Bilel Jamoussi, Chief Study Groups Department, TSB, ITU:

What would you like to see out of regulatory environments?

There has been criticism of wholesale open access networks (WOAN), in which governments create a single network instead of relying on competing mobile networks. However,  if the framework is built in such manner that the operator invests in the infrastructure in the long term, then this will enable MVNOs to play on a more level playing field.

[Despite asymmetry, interconnect is still structured in such a way to disadvantage the smaller players. COULD YOU PLEASE EXPLAIN WHAT YOU MEAN BY THIS?]

The adoption of MVNOs in Africa, and the enforcement of these efforts by regulators, will help support initiatives to increase connectivity and improve people’s lives.

Karmanie Govender is CEO and Founder of DTTech.

Views expressed in this article do not necessarily reflect those of ITU.

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The opportunities of mobile virtual network operators (MVNOs) in Africa

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