Cell C pushes back in MVNO contest

In the face of a growing challenge from MTN and Vodacom in the mobile virtual network operator (MVNO) space, Cell C is positioning itself as the “home of MVNOs”.

It is addressing the intensified competition by adding services and targeting high-utility sectors like banking and retail.

This move comes as Vodacom enters the MVNO space, while MTN is doubling down on infrastructure investments. In response, Cell C is emphasising partnerships and service agility, aiming to carve out a distinct position in a sector dominated by infrastructure-heavy models.

“We are deliberate and intentional about our MVNO business,” said Cell C CEO Jorge Mendes during a media briefing last week. “We believe it’s a massive opportunity in the market, and the bigger players will not be that keen to go as aggressive in this direction, because they have large market shares that will be cannibalised.”

By prioritising a more flexible approach, Cell C is setting itself apart from competitors, seeking to strengthen its presence as a leading MVNO provider. Mendes said that the MVNO model is not just an ancillary business but a core strategic pillar, highlighting partnerships with Capitec, FNB and Shoprite. He said the strategy involves deeper integration with partners to capture previously untapped market segments.

“We think that the high utility games, voice, data, banking, retail, will have the larger piece of potential success, as opposed to perhaps MVNOs in the past, where they’ve been very strong brands, but this hasn’t been high utility complementary services.”

Cell C’s capital-light strategy minimises capital expenditure (CapEx) by avoiding physical infrastructure ownership while expanding its network footprint. Mendes said some Cell C SIM cards can automatically switch networks – from Vodacom to MTN or vice versa – if a particular network is down in a specific area, ensuring continuous connectivity even in areas with zero signal.

The shift towards this model is not without risks. While MTN and Vodacom are heavily investing in physical infrastructure to ensure robust network performance, Cell C’s reliance on virtualised networks could prove to be a double-edged sword. If the virtual model delivers the promised flexibility and cost-efficiency, Cell C could solidify its position as an agile challenger. On the other hand, any performance inconsistencies or perceived lack of stability could alienate customers accustomed to the reliability of infrastructure-heavy competitors.

“This is a key proposition and a differentiator that we are really trying to unlock in every aspect, not just in Internet of Things, but through the MVNO propositions, and our own direct customers, both in prepaid and in postpaid. And that’s quite significant, because it takes us from what traditionally was our own 5,000 base stations to over 28,000 in the country.”

Mendes said Cell C is reinforcing its position in South Africa’s telecom sector by focusing on virtual networks and cloud-based voice services – a calculated approach to compete effectively with other network operators.

“It’s a choice we’ve made to compete very favourably with the other network operators, our own core, our own billing systems, our own spectrum, but just really giving up the radio access network physically and getting a virtual one that gives us an opportunity to compete with quality of service.”

Cell C has launched the first voice call using VoLTE over the AWS platform in Africa. The call, facilitated by ng-voice’s cloud-native infrastructure, enables high-quality voice services while lowering costs and increasing scalability.

“We want to continue to innovate in this format and see if we can get additional efficiencies in the way we carry traffic, always with an intention of making sure that we have a great quality product that’s delivered to our customers and partners.”

Mendes said cybersecurity remains a critical focus for Cell C, especially in the wake of a significant data breach in late 2024 that exposed sensitive customer information. The incident highlighted the urgent need for stronger security measures as digital threats continue to escalate.

“It’s a terrible thing, and I think one of the most top risk items for all telcos globally is in cybersecurity. I think the way technology is evolving… more and more will be digitised. All our information will at some stage be digitised, including documents like passports, driver’s licences, and IDs. As such, cybersecurity remains a top priority.”

_{Photo: JASON BANNIER.}

Network performance and industry recognition

Cell C was recently recognised as South Africa’s top network for video experience by Opensignal and was named a Global Rising Star for Most Improved Networks. The recognition follows the implementation of a Multi-Operator Core Network (MOCN) model, which the company says has been key to optimising performance while managing costs.

Schalk Visser, Cell C CTO, said: “The shift towards a virtualised network has allowed us to move faster, innovate smarter, and focus on what truly matters – giving customers a reliable, quality connection when and where they need it. It’s not about who owns the towers. It’s about how well the network performs in the moments that matter to our users”.

Opensignal recognised Cell C’s implementation of the MOCN strategy, highlighting its impact on network performance. Meanwhile, SA recently rose to 60th place globally for mobile network quality in Opensignal’s Global Network Excellence Index (GNEI).

Mendes said that maintaining reliability through multi-network arrangements is crucial as Cell C continues to position itself as a network aggregator. Cell C says it is a “leaner, smarter, more agile challenger telco,” and is committed to profitable growth and strategic market positioning. The company is focusing on IT modernisation, cybersecurity, and customer-centric systems, including a real-time billing platform aimed at enhancing customer experiences.

*Jason Bannier is a data analyst at World Wide Worx and writer for Gadget.co.za. Follow him on Bluesky at @jas2bann.