Duncan Alfreds
Cape Town – South Africans will soon have an alternative calling option with the launch of a new mobile operator dubbed ‘me&you’.
Representatives of me&you in Cape Town announced on Wednesday that they would launch as a mobile virtual network operation (MVNO) in SA on May 4.
MVNOs use other mobile networks’ infrastructure to sell their services. The me&you MVNO plans to use the Cell C network for its business.
MVNOs can offer cheaper services as they don’t have to spend as much money as traditional network operators who build physical base stations. As a result, call rates on me&you plans are expected to be at 39c per minute with further details about its pricing plans still to be revealed.
In addition, me&you will not have physical retail stores at first as the company plans to sell its offerings online. Virgin Mobile has demonstrated that the MVNO market is fraught with difficulty. While the company launched as a joint venture with Cell C in 2006, it has still to hit one million subscribers in the country.
In SA, it is difficult for MVNOs to operate in an environment where the networks they roam on can consistently undercut their pricing model.
Discounts that an MVNO can earn from its mobile operator are usually tied to the number of subscribers and without scale, it is unlikely that subscribers will see any benefit on tariffs.
In other markets where MVNOs operate, compelling content along with device incentives is usually offered as a customer acquisition tool.
