A new mobile virtual network operator (MVNO) is launching in South Africa and offering unlimited calls for R300 per month and unlimited calls and 1GB of data a month for R450. Called me&you mobile, they are hoping to tap into a market for cheaper calls without selling handsets.
me&you mobile is a SIM-only and online MVNO that is targeting high-end smartphone users who have bought their own handsets and are looking for cheaper voice or data bills.
Roaming on Cell C, me&you will officially launch on 4 May in South Africa. Most user interactions will be through a website (which is not officially live yet) that allows for all aspects of the contract to be customised.
Call packages will start from R50 (for 69c minutes calls) and data begins at R25 for 100MB (or 25c.MB); and can be changed from month-to-month, says me&you’s Brett Howell.
The most attractive package, for this top-end market, is likely to be the unlimited call option for R300. Data bundles for 1GB (R149) or 2GB (R300) are equally cheap.
Howell says me&you is able to offer such aggressive price points because it is a small, mostly virtual operation. It uses a MVNO platform provided by another South African company, MVN-X, whose CEO Steve Bailey says he is able to buy minutes and data at a steeply discounted wholesale rate from the networks. Because MVNOs have less infrastructure, they are able to either “provide more value to their customer or reduce their prices.”
Because of this arbitrage ability to sell cheaper call minutes that MVN-X can “give you special [voice all]price obviously lower than you’d pay in a shop”. Niche MVNOs can compete against the mass-market-focussed networks, says Bailey.
He adds: “In an environment like that in an entrepreneurial country like ours, people are going to take advantage of that”.
Howell says me&you is able to offer such cheap calls because it’s online only, and has very thin margins. “We’ve outsourced to Steve and have no shops and very small marketing costs.”
“That’s part of our model. To be successful, you have to be lean, and niche – otherwise we’ll get drowned out by the bigger networks,” says Howell
Baily says he is the virtual operator’s target market. “You can now get unlimited talk and a gig of data for R450 a month. If you’re a heavy user, it’s a great deal.”
MVN-X has a number of other clients including retail chain Mr Price Mobile.
Howell says more and more MVNOs, which are expected to take advantage of lower interconnect costs and MVN-X’s wholesale discounts, will be good to grow this segment of the telecoms industry that has previously not taken off in South Africa.
“We’re looking forward to that [more MVNOs being launched]. It lends credibility to the category. We are all niche, so we’re not stepping on each other’s toes. People start talking about MVNOs and that helps us.”