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April 30th, 2015 by

shutterstock 244711189 - Me&you: South Africa’s new mobile network operator By Hayley Axford

There has been much speculation about the new mobile network that would be coming to South Africa this year following a marketing campaign of orange banners that features a winking cartoon face.

The teaser campaign, with the #BeUnordinary hashtag, led many to believe that the European mobile network, Orange would be setting up shop in the country. Instead, it has emerged that this campaign formed part of the pre-launch of me&you mobile, a new virtual mobile network operator that will be making its debut on 4 May this year, through Durban-based company, Ignition Group.

French telecoms giant, Orange attempted to launch a mobile operator in South Africa a few years ago, but found that the country did not have similar regulatory frameworks to the ones that European regulators have imposed on mobile network operators in Europe. With no plans from the Independent Communications Agency of South Africa (ICASA) to develop regulations, Orange therefore found it futile to invest in this venture.

South Africa’s mobile market has been slow to accept mobile virtual network operators (MVNOs). This can largely be attributed to the country’s two largest mobile operators, MTN and Vodacom, who have dominated the market with a 90% revenue share between them. It is therefore not surprising that they would decline a working relationship with MVNOs, who primarily attract customers with low prices, which would inevitably affect their profits.

Of all the South African mobile operators, Cell C has been the only company to show interest in MVNOs, displaying their commitment when they helped to launch Virgin Mobile in 2006. Me&you will be South Africa’s first SIM-only mobile service provider. As it is an MVNO, which does not have its own network, it will piggyback on Cell C’s existing infrastructure. Me&you’s  platform will be provided by MVN-X, an Ingition Group subsidiary, headed up by former Virgin Mobile South Africa CEO Steve Bailey. MVN-X also provides services to Mr Price Mobile which was launched in 2014 and is reportedly doing “very well”. Bailey has mentioned that there are “a number” of new MVNOs in the pipeline, which will emerge in the market in the next three months to two years. This includes banks, such as First National Bank, which is rumoured to have an MVNO offering in months to come.

In a statement before the launch of me&you, CEO Brett Howell wrote: “Local mobile users have been conditioned to believe in the perceived benefits of the mobile contract, only to be locked in for 24 months while paying more than they expected. Big mobile networks often use outdated business models that limit consumer freedom and impose hidden costs, such as handset costs, that subsidise their massive overheads. And now users are expected to absorb the recent unforeseen mobile tariff hikes.” This is where me&you comes in, the business will be a niche player in the  market by not inflating rates with the cost of a handset and instead guaranteeing the most affordable call rates in South Africa, with competitive data rates as well. The MVNO will also do away with long-term contracts, giving customers the freedom to choose for themselves. “If you sign up – testing the waters on a R100 – you can change the next month to R400. You really can manage your own telco lifestyle now,” said Howell.

Me&you will operate online only, so there will be no physical stores whatsoever. This, along with no mobile phones being on offer, all helps to keep their costs low, which benefits customers through affordable prices. Howell is confident that me&you mobile is capable of providing the best call rates in the country, as low as 39 cents per minute.

So how does it work?

“We operate completely online, sign-up via then website takes only a few minutes – including RICA and number porting – and even customer service can be done via consumer friendly channels like Whatsapp,” said Howell. Customers can order their services via the website and then their SIM cards will be sent to them, either via post or courier. Me&you mobile customers can also customize their online profiles, where they can buy extra data bundles, change their contracts and turn international roaming on or off. Me&you will also offer an introductory special of unlimited voice calls for R300 per month, to the first 1 500 subscribers.

More will be unveiled on 4 May, when me&you mobile is officially launched.