Vodacom Group CEO Shameel Joosub has warned that South Africa’s mobile market may be heading toward unsustainability as the number of mobile virtual network operators (MVNOs) swells to about 30, potentially fragmenting the market and undermining infrastructure investment.
In an interview with TechCentral on Monday, Joosub cautioned that markets with too many players but too few infrastructure investors often experience stagnation—a trend already visible in Europe’s overregulated telecom sector.
“When you have a lot of players in the market, then the market fragments,” Joosub said. “What you are seeing in Europe is that lots of players and lots of regulation have fragmented the market to a large degree. In markets where there’s more consolidation, you see much better results.”
Vodacom South Africa’s latest financial results reflect these challenges. For the six months ending September 2025, the company reported service revenue growth of just 2.2% to about $1.65 billion (R31.7 billion), a modest figure compared to the double-digit growth in Vodacom’s other markets, such as Egypt and Kenya.
Joosub attributed the slowdown to intense competition from MTN and the emergence of MVNOs offering cheaper packages.
Vodacom entered the MVNO space just over a year ago, signing Mr Price Mobile as its first customer and establishing its own mobile virtual network enablement (MVNE) platform. However, it has yet to onboard another MVNO, with ongoing negotiations focused largely on pricing and market segmentation.
“We look at the size of the MVNO, their capabilities, and if they target new segments. On that basis, we decide whether to bring them on,” Joosub explained.
Vodacom’s chief rival, MTN, which has a far longer history with MVNOs such as Standard Bank Connect, TFG Connect, and Afrihost Air Mobile, has issued similar warnings.
MTN Group CEO Ralph Mupita told investors in August that the unchecked proliferation of MVNOs could lead to market instability.
“You want to avoid a situation where MVNOs on your network are providing data cheaper than you, the generator of that data—but the costs sit with you,” Mupita said. “Look at the Netherlands 10–15 years ago; MVNOs wrecked the market. If you’re not careful, you’ll have a Netherlands effect in South Africa.”
By contrast, Cell C has taken a more MVNO-friendly approach, viewing virtual operators as central to its growth strategy. The company doesn’t maintain its own radio access network but instead runs a virtualised system through roaming agreements with Vodacom and MTN, allowing it to host numerous MVNOs without heavy infrastructure costs.
As South Africa’s telecom sector evolves, Joosub’s comments highlight a growing debate: how to balance competition and sustainability. While MVNOs have improved consumer choice and pricing, industry leaders warn that too many players could erode profitability and slow infrastructure development, potentially hurting the very innovation the market seeks to encourage.
