The trap inside South Africa’s banking MVNO boom
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South Africa's major banks — Capitec, FNB, Standard Bank, Nedbank, and soon Absa — have built profitable MVNO businesses without owning the underlying network identities (IMSIs) or phone numbers. This creates a structural dependency on host operators like Cell C and MTN, who control the infrastructure and negotiate wholesale renewals from a position of strength. Capitec Connect's free on-net calling feature, while commercially successful with 1.5 million subscribers and R442-million net income, deepens this dependency by creating switching costs that make migrating subscribers to a new host commercially prohibitive. Bulk IMSI portability doesn't exist in South Africa and isn't on the regulator's agenda, while a regulatory fix decoupling IMSI assignment from spectrum licensing could take 7–10 years. Dual-hosting strategies manage future risk but don't resolve existing base dependency and break the on-net calling proposition. The host operators ultimately hold the terms at every wholesale renewal.
