The Unholy Union of MVNOs: How Regulation is Suffocating Innovation
As the MVNO market in South Africa continues to limp along, it’s clear that the lack of clear regulations is strangling the life out of this industry. Andre Wills, MD at Africa Analysis, warns that the "light-touch" approach to regulating MVNOs is nothing more than a thinly veiled attempt to stifle innovation and maintain the status quo.
The Stranglehold of Icasa
Wills notes that the absence of a licensing framework for MVNOs in South Africa has led to a lack of legal standing, leaving these operators vulnerable to disputes and uncertainty. Meanwhile, Icasa’s draconian spectrum licensing conditions have created a bottleneck, allowing only a select few to enter the market.
The C-Connect Conundrum
The latest MVNO to launch, C-Connect, has chosen Cell C as its infrastructure partner, but even this partnership is shrouded in uncertainty. With no clear regulatory framework in place, C-Connect’s very existence is under threat. Richard Anderson, COO at C-Connect, admits that the company’s success hinges on its ability to market and engage with customers, but with no clear direction from Icasa, the future looks bleak.
The Budget Basket Case
Wills points out that the budget segment is one of the most lucrative areas for MVNOs, but even here, the lack of regulation is stifling innovation. Africa Analysis data shows that only a third of MVNOs focus on the budget segment, leaving a vast opportunity untapped.
The Death of Niche Markets
Wills also notes that the lack of regulation is killing off niche markets, such as machine-to-machine communication and business-focused MVNOs. These areas offer huge opportunities for innovation and growth, but without a clear regulatory framework, they remain unexplored.
The Cha-Ching Con
C-Connect’s commercial offering, which includes a 240-minute voice bundle for R99 and 1GB of non-expiring data for R85, is touted as a game-changer, but is it just a desperate attempt to stay afloat in a market that’s drowning in uncertainty? The company’s cashback incentive, Cha-Ching, is a token attempt to attract customers, but will it be enough to save C-Connect from the chop?
The Standard Bank Scam
Wills points out that some of the most successful MVNOs in South Africa have had the benefit of an existing retail customer base, but what about those who don’t? Kartik Mistry’s Standard Bank Connect, for example, has been able to take advantage of an existing customer base, but what about C-Connect and its ilk?
The Verdict
The MVNO market in South Africa is a disaster waiting to happen. Without clear regulations, innovation is stifled, and the industry is left to rot. It’s time for Icasa to step up and provide a framework for MVNOs to thrive. Anything less is a recipe for disaster.
