The MVNO concept in the African market will largely benefit from its novelty and represents an important approach in helping operators establish products and services within unreached population segments the end result of which is increased penetration.
As mobile telecommunication has proved a much needed “accelerator” to socio-economic development, MVNOs, when well-explained are likely to find a hearing with MNOs and Governments alike.
However, for an MVNO entry to produce viable business outcomes, a conscientious due diligence process is indispensable. Huge, pan-African MNOs dominate market share in a number of countries and their influence ought not to be discounted.
It is as important identifying the right MVNO-MNO fit of ideas as it is to have the MVNO ideas themselves (however innovative).
The overall record with MNO setups has reflected good market uptake of their services.
The MVNO may, at first, face suspicion from established MNOs for whom a loyal customer base, amidst raging price wars that have led to decreased ARPU, is critical to maintaining
profitability. Keeping that in mind, the MVNO investor will realize price-led/retail MVNO ideas may encounter more resistance from MNOs unless a strong segmentation business plan can be articulated with a view to proving increased “proxy revenues” through bulk/wholesale purchases of MNO air-time by the MVNO.
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