The world is all abuzz with the focus on the next most precious resource of the 4th Industrial Revolution, data – the “black-gold” of the digital age. In order to be a major player in this new realm South Africa needs to address its connectivity inequality. More and more human needs are being met through digital connectivity. A vital, thriving telecommunications market is the cornerstone for the acquisition of this new digital commodity.
Valde Ferradaz, CEO of MVN-X, a business providing turn-key solutions for large scale organisations wanting to enter the mobile telecommunications market, believes Mobile Virtual Network Operators (MVNOs) will be key to exponential growth and sustainability. Research and Markets global outlook report on the global MVNO market projects market growth at a CAGR rate of 8.4% in the forecast period of 2020 to 2027.
An MVNO is a business that enters the telco market by packaging and selling wholesale data and airtime on to the consumer, while also providing value-added benefits such as UCount rewards as in the case of SB Mobile. How this model benefits businesses and consumers is all about understanding data as an essential commodity, comparable to food and energy. Understanding consumer behaviour and how, being in a position to reward consumers for loyal day-to-day transactions, is also pivotal in capturing market share at a time when consumers are cash strapped.
Ferradaz paints a prospective model for retailers, “In many respects retailers are already leading the way towards multi-faceted service offerings under one roof. For instance, they already offer financial services: consumers are able to withdraw cash from tills, pay their utilities and purchase airtime and data on top of what their traditional model would have been, in other words, trading in goods. The customer is rewarded with the convenience of just needing to make one trip to cover all their basic needs. However, by taking it that step further and entering the telecommunications space as an MVNO, retailers are now placed to offer the consumer competitively priced, house packaged airtime and data, similar to how they would offer house brand rice, bread or tinned goods, and at the same time, through their rewards systems, often already in place, give customers cash back to further use towards essentials. This creates a near impenetrable value chain, as it benefits both the retailer and the consumer.”
Nearly 60% of South Africans live on less than R41 a day and as such data can’t fall into the basket of affordable essentials for the majority of households, yet it is the key ingredient for job seeking, digital upskilling, banking, remote working and, as the lockdown demonstrates so well, human connection. Even with this year’s price reductions from two of the largest network providers, Vodacom and MTN, data prices remain high for the average South African which is why attaching it as a reward incentive to the essentials that meet their basic needs can revolutionise customer loyalty as well as bridge the digital divide.
Ferradaz intrinsically understands the nuanced obstacles to accessing data in a developing country with a vast geographic spread all too well having worked in Suriname and Papua New Guinea with the Digicel Group. He followed a vital resource of the region, rice, and had traders who trekked through the countryside selling rice. “Rice was the commodity with the furthest reach, so we hitched data on to that. Data became a currency with which to be bartered with like gold and coffee.”
Ferradaz is a radical thinker who feels passionate about connectivity and the potential for transformation hinged on digitisation. “South Africa has world class infrastructure mostly due to privatisation of the industry, however regulation needs to play a big part in mediating and ensuring healthy market competition. The market share in telecommunications has to open up or you throttle the economy. In an optimum society, connectivity should be freely accessible to all.”