Ask Arthur: Should I choose a mobile operator or MVNO?

Q:  I’ve heard about MVNO as a cellphone account option. What is it, and is it a good idea if I’m trying to manage my budget?

A: Managing your budget better is the single most important reason to consider this option.

If you haven’t heard the term before, MVNOs are mobile service providers that don’t own the physical infrastructure used to carry data and calls. They lease capacity from one of the big players in the market, like MTN or Cell C. That’s not the same thing as Rain roaming on Vodacom, which is more about sharing infrastructure. All major operators are required by the regulator, Icasa, to host MVNOs event9.

The MTN and Cell C platforms allow MVNOs to offer mobile services, often at a more competitive price, as they absorb a portion of the margins that operators charge – along with a few other tricks that are specific to providers.

The appeal of MVNOs lies in flexibility and cost-effectiveness. Since they don’t have to invest in building and maintaining a network, they can pass on the savings to customers. This often translates to more affordable data bundles, cheaper call rates, and customisable packages.

In South Africa, some of the country’s largest banks have launched their own MVNO services, integrating them with their existing financial products. FNB Connect, for example, has been around for a while and has proven popular among FNB clients to the extent that it is probably the biggest MVNO in the country.

Standard Bank and Capitec have also joined the fray, offering mobile services that cater specifically to their customer bases, often with added perks such as loyalty rewards or banking benefits.

The most recent entrant in the South African MVNO landscape is C-Connect, which just launched this week. It promises to shake things up by offering competitive rates and innovative packages designed to appeal to budget-conscious consumers. C-Connect is positioning itself as a straightforward, no-frills option for those who want to keep their mobile costs down without sacrificing service quality, but also offers loyalty rewards and various other perks.

So, is switching to an MVNO a good idea to manage your budget? The answer depends on your current mobile usage and what you value most in a service provider. An MVNO could offer a more tailored and cost-effective solution, with flexible, month-to-month contracts.

Another factor to consider is the additional services and benefits that MVNOs, especially those linked to banks, might offer. If you’re already banking with FNB, Standard Bank, or Capitec, it could be convenient and cost-effective to consolidate your services with their MVNO offerings. These plans often come with the added benefit of integrating with existing banking apps, making it easier to track and manage spending.

The likes of C-Connect offers zero-rated use of its app, meaning it doesn’t incur data charges, and has no upfront charges. One only pays for use. 

Just be sure to assess your priorities and do a bit of comparison shopping.

* Arthur Goldstuck is CEO of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on social media on @art2gee.