Internet web. Picture: THINKSTOCK
Internet web. Picture: THINKSTOCK

Cell C has added another virtual network operator (MVNO) to its network that will further boost its revenues and provide choice to consumers.

The company said on Friday that British-based mobile services provider Lycamobile would use its network to provide voice calls, text and internet data services. It becomes the seventh entity to use Cell C’s network to offer mobile services. The network-roaming model lowers the barrier to entry for new entrants and also boosts sales for the network provider.

The companies on Cell C’s network include Virgin Mobile, FNB Connect, mrpMobile and SmartMobile, with more than 1-million subscribers in total. SA is Lycamobile’s first entry into sub-Saharan Africa. The company was started 11 years ago and operates in 23 countries. It has 15-million customers.

Lycamobile group chairman Allirajah Subaskaran said "as one of the most influential and technologically advanced countries in the region, SA is a natural choice for Lycamobile, as we continue to expand further into the thriving African telecommunications space".

Lehlohonolo Mokenela, industry analyst for the digital transformation practice at Frost & Sullivan Africa, said the value proposition of MVNO had "followed straightforward go-to market approaches, either following a consumer-centric approach, focusing on industries such as retail and financial services, or providing cheap international calling".

Lycamobile, along with Danish MVNO Lebara, fell into the latter category, he said.

Mokenele said SA had a large and growing expatriate and migrant population from as far as the US and Europe, and predominantly from Nigeria, Zimbabwe and the Democratic Republic of the Congo, and so, an MVNO with the international calling partners that Lycamobile had was likely to find value in the local market.

Lycamobile will most likely face off against MTN and Vodacom as they compete to lure customers.

"In the end, Cell C gets to add yet another MVNO with little risk of having its customer base cannibalised," Mokenele said.

Lycamobile said it was finalising details of its product offering for the market in SA.

Last Monday, Cell C announced the completion of an equity deal with Blue Label and Net1, in terms of which both companies will own a combined 60% interest in the mobile network operator.

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