FNB has signed new deals with two of SA’s mobile operators — Cell C and MTN — to boost its telecoms offering, FNB Connect.
This signals the bank’s push to offer more telecoms services, as well as intensifying competition for Cell C in a space that it has dominated for years.
FNB has the largest mobile virtual network operator (MVNO) business in SA, a market that also includes Standard Bank Mobile, Mr Price Mobile and previously Virgin Mobile.
MVNOs constitute about 2% of total mobile subscribers in SA. They are usually non-telecom businesses that lease network infrastructure from mobile operators to sell data and voice services to their customers.
Cell C has been the largest MVNO provider for a number of years but is now facing growing competition from the likes of MTN, which has been mandated by the government to offer similar services in the market.
This week, FNB — which has traditionally used Cell C’s network to offer its service — signed a new deal with MTN, that now sees it using a “dual vendor strategy” for Connect.
The first agreement is the addition of MTN as a network partner, which FNB says allows customers to enjoy “the best of both worlds in network quality”.
According to FNB CEO Jacques Celliers, the bank is set to use the new partnership to offer services in areas such as 5G and connected devices, referred to as the internet of things (IoT).
“This collaboration is consistent with our efforts to leverage reliable network infrastructure in the market to accelerate our delivery of cost-effective data and voice plans and other ICT services.”
“In the months ahead, we will expand our range of services by introducing more cost-effective and tailored solutions for both individual and business customers. We will also offer fibre, 5G and LTE for faster internet speeds and reliable connectivity for both residential and commercial customers.”
FNB’s second agreement is an extension of its existing MVNO relationship with Cell C.
Stephen Morony, chief officer of wholesale business at Cell C, said the operator had signed a multiyear extension of its existing agreement with FNB Connect, which has a dual vendor strategy, and “remains a strategic partner for the telco”.
“We look forward to our continued relationship with the FNB Connect team while welcoming competition in the MVNO space.”
“Cell C is confident that our technology platform, our extensive MVNO partner experience, range of service offerings and value propositions are competitive and will serve our varied customer segments well, enabling ever more choice for the SA consumer.”
FNB sold about R400m in digital devices through the FNB App in the first half of its financial year.
These deals come on the heels of former FNB Connect CEO Bradwin Roper having moved to lead MTN SA’s financial services unit from May.
Roper’s appointment makes sense given the adage that banks are trying to be more like telecom operators, while telecom operators are trying to be more like banks.
With declining voice revenue and data margins squeezed due to public pressure and regulations, mobile operators have been looking at other ways to create revenue streams from their large customer bases. For MTN, which has about 289-million subscribers across Africa and the Middle East, fintech is one of its areas of focus, driven by mobile payments.
SA’s second-largest mobile operator described his appointment as “a deliberate move from MTN as it pushes forward in its evolution from telco to techco [technology company]”.
That deliberate approach appears to be bearing fruit.
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