Spectrum release opens the way for Mobile Virtual Network Operators

By Yaron Assabi, CEO and Founder of MVNE

In one of the most important recent technology milestones in Africa’s history, the finalisation of the long-delayed auction of additional radio frequency spectrum, has created a host of new opportunities for Communication Service Providers and Mobile Virtual Network Operators (MVNOs).

MVNOs are essentially independent operators that manage the customer experience and billing relationship with their customers but buy network capacity and connectivity from a Telco and resell services along with value-added features and products that tend to be aimed at niche markets. 

The increasing importance of data in a digital world has opened additional opportunities for MVNOs to combine their core business value proposition with the telco value proposition and create a unique and differentiated CVP (Customer Value Proposition) for their customers.

For example, DSTVs Internet offering consists of cost-effective data bundles linked to their content subscriptions services to make the overall proposition to their customers more attractive. 

Access to new spectrum means that operators will now be able to improve on the 4G-model networks that are currently in use, and also build – at a much faster pace – new 5G networks. This, in turn, will create an opportunity for these MVNOs to provide new digital solutions for businesses and consumers.

It should be obvious that in today’s digital world, broadband has essentially become a ‘ticket to the game’ as far as participation in the modern economy is concerned. It is imperative that the country evolves its high-speed broadband infrastructure, if it is to become more globally competitive.

The auctioning of this radio frequency spectrum was critical in determining the future direction of South Africa’s economy. Obviously, the more connected an economy is, the greater its need for higher-capacity bandwidth. The additional capacity means that Telco’s will be able to grow next-generation services on their networks. As more MVNOs are offering niche products and services, they too will require the additional bandwidth provided by this extra capacity. 

Case in point, content streaming services offered by DSTV Internet used in our example above require faster network services for better quality – where the released spectrum facilitates this.

The value of this spectrum can be seen in the fact that the expected sale price of the various spectrum lots available was anticipated to be around R8-billion, yet the final total was actually R14.4-billion. It is fantastic that government has been able to raise this kind of money, which must be utilised to improve public service and help resuscitate the economy.

he newly released spectrum is aligned with the need for digital transformation and faster and more reliable access to the internet enables cloud-based services, collaboration tools and offers SA an opportunity to compete in the global arena. 

The ability to serve rural areas and provide connectivity that offers better access to social services, job opportunities and greater economic activity is critical.

As we become more connected as a nation, it is necessary to ensure that every citizen has the opportunity to access the digital world. The extra capacity available now will open up opportunities like taking tele-medicine to rural villages and offering online education in remote areas. The hope is that this will ultimately lead to better service delivery from the government and increased job opportunities as the private sector leverages the power of the digital world.

This is more than just wishful thinking – operators that obtained spectrum will be required to continue expanding broadband infrastructure into underserved areas. In fact, the licensing of the new spectrum has been accompanied by agreed social obligations to connect some 18 520 public schools, 5 731 public health facilities, 8 241 offices of traditional authorities and 1 154 police stations over the next three years.

As we move towards an increasingly connected economy, digital technology serves as an accelerator for socio-economic development, particularly as better connectivity provides citizens with access to a growing number of services and opportunities. The additional spectrum that has been released could thus be described as a win-win situation for service providers, consumers, citizens and the government.

The new spectrum is no doubt something of a game-changer, with enhanced 4G and 5G services already being rolled out. Furthermore, the switch from analogue to digital TV soon should make even more spectrum available. Thus, we can expect to see more critical services being launched as spectrum is re-allocated, leading in turn to improved economic progress, greater levels of innovation, and – perhaps most crucially, as far as consumers are concerned – to a significant drop in the costs of mobile data.

Yaron Assabi is an entrepreneur with a passion for ICT & founded what is known today as the Digital Solutions Group in 1998. He served as the ICT strategist for the Nelson Mandela Foundation and formulated the strategy for the 46664 global communities. He is currently the Chairman Emeritus of the Mobile Marketing Association of South Africa and serves as a non-executive director on the IAB board.

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