Exploring the role of hyperscalers in South African MNOs' business model innovation

Abstract

The rapid rise of hyperscalers has transformed the competitive landscape in the global telecommunications sector, challenging the traditional connectivity-focused business models of mobile network operators (MNOs). This study investigates how South African MNOs are navigating this disruption through business model innovation (BMI) spurred by the urgency to transform routine dynamic capabilities. Using Teece’s dynamic capabilities framework and the modern business model innovation framework, the research explores how sensing, seizing, and transforming capabilities enable incumbents to respond strategically to hyperscaler competition. An interpretive qualitative research approach is employed to understand how the industry defines dynamic capabilities for business model innovation amidst hyperscaler disruption. The study enriches theory by providing an African perspective on MNO digital transformation and extending dynamic capabilities research into the context of hyperscaler disruption. Practically, it offers strategic insights for MNOs aiming to reposition themselves as digital service providers in an increasingly platform-driven environment. Findings are intended to inform industry leaders about strategies to address disruptive challenges. The results reveal that partnerships with hyperscalers, integration into cloud ecosystems, and experimenting with platform-based business models are becoming important strategic responses. MNOs demonstrate strong sensing abilities in recognising shifting value pools towards the cloud and digital services; however, capabilities related to seizing and transforming opportunities remain inconsistent, hindered by legacy systems, regulatory uncertainties, and organisational inertia.