Old Mutual, a prominent insurance entity based in South Africa, has ventured into the telecommunications sector by establishing a Mobile Virtual Network Operator (MVNO), Old Mutual Connect, operating on the Cell C network. This strategic move comes amidst a burgeoning growth phase within the MVNO market.
Clarence Nethengwe, the appointed CEO designate of OM Bank, highlighted that the introduction of Old Mutual Connect aligns with the company’s Integrated Financial Services (IFS) strategy, aiming to deliver substantial value-added services to its clientele. The initiative seeks to offer competitive mobile services tailored to enhance connectivity for the lower-income demographic, alongside providing exceptional data package deals to its customers.
Nethengwe emphasized the importance of affordable data and dependable connectivity for the mass market, noting these as crucial factors for enabling full participation in the economy and facilitating digital interactions with Old Mutual’s broader service offerings. He revealed that Old Mutual Connect would utilize a multi-operator core network agreement, ensuring the provision of reliable, high-speed mobile services by operating on Cell C’s network, which benefits from existing collaborations with major operators Vodacom and MTN.
For customer convenience, SIM cards are available for purchase at a nominal fee of R5 ($0.29) across all Old Mutual branches, with data and airtime also accessible through various channels including branches, partners, and digital platforms.
In a significant development announced in September 2024, Old Mutual disclosed its intentions to inaugurate a banking arm in the first quarter of 2025, having received the green light from the Prudential Authority regarding the operational readiness of its systems. Clarence Nethengwe has been named as the CEO-designate of this upcoming bank, with his tenure commencing on 1 November.
The MVNO landscape in South Africa has witnessed remarkable expansion, with several new players entering the market over the last five years. MVNOs, which do not own the network infrastructure but instead procure wholesale access from mobile network operators to serve their subscribers, have seen a dramatic increase in their presence. By December 2023, the count of MVNO SIMs in the South African market had escalated to over 4.3 million, achieving an annual growth rate of 51%.
Forecasts suggest a continued upward trajectory for the MVNO market, with expectations to hit 10 million SIMs by December 2028. The potential introduction of large retail brands into the sector could further spur growth, potentially elevating the SIM count to 13.5 million.
Old Mutual Connect enters a competitive field alongside other significant MVNOs like Capitec Connect, which has emerged as South Africa’s largest MVNO with over one million active SIMs, and FNB Connect, boasting 879,000 active SIMs in 2022 with aspirations to reach the one million mark shortly. Additionally, August 2024 saw the launch of C-Connect, another MVNO leveraging C-Cell’s network infrastructure, further enriching the diversity and options available in South Africa’s MVNO market.
