SA’s telecommunications industry continues to attract non-traditional entrants such as retailers and insurers seeking to enter the mobile virtual network operator (MVNO) market. However, many greenfield MVNOs struggle to gain traction and should consider partnering with established telecommunications brands, according to Damien Burnett, sales director at telecommunications solutions provider VAS-X.
Greenfield MVNOs are defined as new entrants that launch telecoms services from scratch, without legacy systems, existing subscribers or inherited processes. These businesses typically use connectivity as a product to deepen customer loyalty and create new revenue streams.
Burnett points to research from BMIT showing strong growth prospects for the sector. The research firm estimates that active MVNO subscribers in SA could reach between 11 million and 12 million by 2029, representing a compound annual growth rate of 18%, with MVNO growth expected to outpace that of traditional mobile network operators.
In March 2025, ITWeb reported on the introduction of a growing number of mobile virtual network enablement (MVNE) platforms. The report identified several new entrants into the MVNO space via MVNEs, including Melon Mobile, Telkom and JSE-listed Huge Group.
Despite these opportunities, many greenfield MVNOs fail to gain sufficient market momentum, said Burnett. He listed several challenges, including the lack of an existing customer base, limited billing relationships and an insufficient understanding of customer needs and preferences.
“The process of understanding and trusting a new brand and then opting for the complication of establishing a new billing relationship, especially where there are no associated value links (ie, sign up for Shoprite mobile, get exclusive discounts on groceries) impacts the timeframe new MVNOs face in reaching the point of return on investment. Thus, many new entrants run out of runway before succeeding,” Burnett said.
VAS-X advocates a partnership model in which new MVNOs collaborate with established and trusted telecommunications brands.
According to Burnett, such partnerships can reduce risk and accelerate market entry by combining telecoms expertise and regulatory knowledge with existing customer relationships.
“If greenfield MVNOs team up with established, trusted brands that provide their telecoms expertise and regulatory know-how, it will help them launch successfully. In this symbiotic relationship, the brand can focus on its core business, while the MVNO taps into the brand’s existing customer relationships to create a new revenue stream. The result is a real win-win; think faster market entry, lower risk and customer engagement based on real insights,” he said.
Burnett added that these arrangements can speed up subscriber acquisition and shorten the path to return on investment. He cites SPAR Mobile as an example.
“SPAR Mobile is a prime example of this kind of relationship. The retailer launched its MVNO in partnership with a tech company called megsApp. By co-creating an MVNO, both parties can focus on what they do best: the brand deepens customer engagement and opens new revenue streams, while the telco ensures seamless service delivery and compliance.”
Mark Walker, director at technology consultancy T4i, said partnerships with existing telcos offer MVNOs key advantages. “The advantages of partnerships with existing telcos, depending on whether the MVNO is a niche player or a premium enterprise-level MVNO, are agility and flexibility related to technology choices and pricing logic, and network superiority afforded by being associated with the perceived ‘best’ telco.”
Walker added that MVNE concerns centre on quality of service, while MNOs may worry about cannibalisation of retail customers and brands. He noted: “Significant savings on initial infrastructure cost outlays and clear scalability roadmaps, coupled with revenue guarantees and real-time wholesale reconciliation, make for a strong argument.”
He believes SA’s telecoms market is shifting towards a digital services ecosystem, with smaller MVNOs giving way to operators offering high-utility services, IOT-based enterprise connectivity and app-enabled data acquisition through partnerships.
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