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Mobile virtual operators compete with established players in Africa

Rebecca Wanjiku | July 1, 2014
Mobile virtual network operators (MVNOs) are set to shake things up and challenge established players in the African telecom market.

Pater said that mobile money services alone can not be the sole value proposition for new service providers.

As African markets become more middle class and affluent, financial transaction methods will diversify and reliance on mobile money will probably decline, Pater noted.

While licensing of new players is likely to increase competition and push services in more underserved areas, Pater said competition is still often about coverage — moving now more to data and mobile broadband coverage — and pricing.

Most transactions in sub-Saharan Africa are cash-based and Waita said that there is enough space for all players to operate and grow their businesses, provided they are aware of the risks and are innovative.

"Based on our experience in this industry, we have found that coverage plays a crucial role in the acquisition and retention of customers; innovation, reliability and customer service play a critical role in determining a customer's choice. We foresee that the entry of MVNOs will likely boost the ongoing innovations race which in the end is good for the customer," added Waita.

The MVNOs are expected to provide SIM cards with unique numbering and to provide billing and customer care services like other traditional players are expected to. They are also expected to meet Quality of Service (QoS) parameters as well as Service Level Agreements (SLAs).


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