Absa is settling the building blocks to take to market its mobile virtual network operator (MVNO), joining Nedbank as the last of SA’s top five retail lenders to offer telecommunication services as banking groups extend their services beyond traditional banking.
In turn, telecom groups flex their muscle, offering financial services in a highly dynamic consumer market that is forcing companies to evolve to meet consumer needs.
MVNOs are usually non-telecom businesses that lease network infrastructure from mobile operators to sell data and voice services to customers.
Cell C has been the largest MVNO provider for a number of years but is facing growing competition from MTN, which has been mandated by the government to offer similar services.
Absa preferred not to share details of its foray into the MVNO market or when it planned to take its proposition to market.
“As part of our broader value-added services (VAS), we are assessing models in the mobile virtual network operator space to understand how this could enhance our value proposition and strengthen everyday banking experiences for our customers,” an Absa spokesperson said.
“Our approach is deliberate, insight-led and informed by extensive customer research to ensure any future proposition adds meaningful value to our customers. We will share further details in due course through our formal channels.”
Absa, under new group CEO Kenny Fihla, has set its sights on clawing back lost retail banking market share, having embarked on a client-centric approach.
Nedbank in September launched its MVNO proposition, Nedbank Connect, another late entrant to the market. FNB was the first out of the starting blocks in launching an MVNO offering 10 years ago. Standard Bank introduced its MVNO offering in 2018 and has more than 300,000 mobile customers.
For a number of years, the largest player has been FNB. According to Africa Analysis, rival Capitec Mobile has emerged as SA’s largest MVNO, followed by FNB Connect. Both players boast more than a million SIM cards in the market.
Capitec has certainly brought the fight to traditional operators with its service. When it launched its mobile unit it stood out by offering flat rates and data that does not expire.
Just this year, Capitec has added more products to its MVNO proposition, including the lucrative airtime advance and sale of smartphones.
Capitec already captures more than 40% of SA’s airtime and data transactions. Its foray into the lucrative airtime advance market is yet another new revenue stream for the lender.
Airtime advance has become a big contributor to revenue from SA financial services for mobile providers.
For Vodacom, in the 12 months to March 2025, airtime advance was one of the top three lines of business driving the company’s fintech growth in SA. Across its operations, the group said it facilitated 1.7-billion airtime advances. For the company the microloans translate to about half of the total prepaid recharges in SA.
SA banks have been rolling out innovative VAS products as a means to retain active clients and woo new ones to their fold, with clear winners and losers in this regard.
Capitec in the year to end-February reported a 56% surge in net income from VAS to R4.2bn due to higher client adoption as the VAS products mature, as well as an increase in the number of clients using VAS to 10.9-million.
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