Following the Competition Commission announcement that Vodacom will reduce monthly data prices from the beginning of April, leading MVNO enabler, MVN-X CEO Valde Ferradaz reckons the South African MVNO market, which is expected to register a compound annual global growth rate of 8.8% from 2018 to 2023, is poised for even greater acceleration.
This welcome announcement means compliance with the earlier instruction from the Competition Commission to Vodacom and MTN to reduce their prices by “at least 50% and 30%”, according to EWN. This reduction will be phased in over a period of two years across all channels, seeing one gigabyte of data dropping from an average R149 to no more than R99 per gigabyte.
According to Ferradaz this is a necessary and positive move for the industry at large, “It’s definitely a step in the right direction for both the economy and the consumer.” He goes on to explain that one of the key benefits of powerful, trusted brands purchasing voice/data at wholesale is, “That MVNOs are in a position to add significant value and affordability to the lower-income sectors, and they are positioned to do so now, more than ever before.”
Ferradaz continues that MVN-X believes it is imperative that the market opens up, and in order to see this happen, it requires businesses with deep rural and geographical reach to get involved. “MVNOs with market penetration and large, recurring customer bases have a means of connecting the nation, and making connectivity accessible, affordable and convenient to all tiers of society.”
The encouraging news effectively translated, means that fairer pricing structures will impact all tiers of the market, especially the disenfranchised, and this, in turn, has the potential to enable more consumers to gain access to what has until now, been expensive and largely unattainable for the large majority.
On the importance of having a connected nation, Ferradaz explains, “Connectivity plays a vital role in the community, especially in rural areas where access to essential services such as medical, jobs, educational support and transport is a massive challenge. Affordable access to voice and data must be used to empower people in all areas of life and most essentially at this time, in healthcare. Accessibility to information by all is absolutely critical. Lower data prices will make a significant and lasting impact on how we communicate around these community-based services.”
The global mobile virtual network operator (MVNO) market was valued at $54.1-billion by Market Watch two years ago. “Even in South Africa’s anaemic economy, this is fertile ground which has just received a most timely government intervention,” comments Ferradaz. MVN-X is South Africa’s MVNE (mobile virtual network enabler) market leader, already enabling Standard Bank Mobile, Mr Price Mobile, and Clientele Life amongst others, and is well-positioned to build on its more than 50% year-on-year growth as realised in 2018/2019. Ferradaz says the company is showing no signs of slowing down within this flourishing Telco sector.
Founded in 2012 and a subsidiary business of the Ignition Group, MVN-X is an end-to-end MVNE which provides turn-key services to MVNOs. Based on an exceptional 2018/2019, Ferradaz says: “Our market is in an upswing and we are expecting to grow from 400 000 to 800 000 active subscribers in 2020 and to more than one million active subscribers by 2021. With the Competition Commission regulating data prices – these targets appear even more within reach.”
“With the imminent drop in data prices, there’s no time like now, for businesses with reach to partner with us in an effort to connect the nation, at scale and with pace. Any business looking to offer mobile services to their recurring customer base so as to enrich their value proposition, offer value for money and thereby retain or increase their share of wallet, can benefit from establishing an MVNO and should speak to us,“ concludes Ferradaz.