Clothing and Homeware retailer Mr Price recently became the first South African retailer to launch their services as a Mobile Virtual Network Operator (MVNO). Their offering is called MRP Mobile and will be the second MVNO in South Africa after Virgin Mobile.
MVNOs operate by using a third-party operators’ network infrastructure to provide services to consumers under their own brands.
Although they have confirmed that they have launched services to their clients, Mr. Price has not spoken about the broader strategy behind this move.
The launch was made possible by MVN-X, a subsidiary of Durban-based Ignition Group, headed by former Virgin Mobile South Africa boss Steve Bailey, which has positioned itself as a mobile virtual network enabler (MVNE).
Bailey’s business provides a full range of MVNE services to virtual operators. This includes complex billing capabilities and customer relationship management systems, as well as a call centre and procurement and logistics facilities.
Although they are popular in the US, Europe and Asia, MVNOs have not previously seen much uptake in South Africa. This, however, may be set to change. Following the news of Mr Price’s new offering, there are rumours that FNB is in close talks with Cell C regarding the possibility of becoming an MVNO.
Cell C has been actively marketing itself as an MVNO platform recently. They are the network behind Virgin Mobile and apparently several other companies are showing interest in the possibility. There is however a question around whether Cell C’s network can handle the extra pressure. They are currently investing heavily in infrastructure to cope with the growing demands on its network, which has been criticised for quality problems recently.
Another potential player in the MVNO field is Orange who are trying to increase their presence in South Africa.
The French mobile operator is currently looking at expanding their retail space in the country through a series of flagship stores, or partnerships with existing retailers in order to sell their mobile offerings, which are primarily targeted at travellers. They previously had presence in Nashua Mobile stores as a branded ‘Orange corner’, but this fell away when Nashua Mobile folded.
Orange has however stated that their overall ambition for South Africa is to become an MVNO. To this end, they are slowly increasing their brand presence in the country while they wait for the opportunity to develop.