FNB Connect plans to ramp up the rollout of fibre packages to clients as it expands its telecoms services.
In 2015, FNB was the first bank to become a mobile virtual network operator (MVNO), which refers to companies that piggyback on the network infrastructure of cellphone operators to offer their own branded voice and data packages.
FNB roams on both Cell C and MTN network infrastructure to offer customers a range of discounts on services, including a free WhatsApp messaging service. “We provide fixed wireless access, a home solution. It is very limited at present, and it’s one of the things we’re considering expanding,” said FNB Connect CEO Sashin Sookroo.
“There’s a need for fibre access, and the market resonates with our fixed wireless services. That is definitely the focus area,” Sookroo said.
He said the company was in discussions with a few fibre infrastructure providers.
In recent years, a number of companies have entered the MVNO, most notably JSE-listed food and clothing retailers — Shoprite, Pick n Pay, TFG and Mr Price — and some banks, including Standard Bank and Capitec. They are integrating telecoms products and services into their loyalty and incentive programmes in a bid to retain and attract customers.
There are just under 20 MVNOs, with the bulk of them roaming on the Cell C network. Vodacom and MTN have also opened their networks to third parties as part of the spectrum licence conditions.
For traditional mobile network operators, this is a revenue stream for their wholesale businesses as those MVNOs buy voice and data access. The rationale behind companies becoming MVNOs is mainly to incentivise customers through loyalty programmes that are buying primary products from these companies. The MVNO market is estimated to be about 5% of the total telecoms sector.
Sookroo said there was still plenty of opportunity for growth. He did not want to reveal FNB Connect’s total number of customers. Rival Capitec has over 1.2-million customers on its mobile service. “We don't chase the numbers. We chase our customers staying with us ... getting quality services,” he said.
“So, I mean, we can focus on volume or we can focus on the value we bring back to customers, and the real thing is, are we resonating with our customers sticking with us? Because, like a lot of SIM cards are issued in the market every year, but there's a lot of churn in the SIM cards, and we don't want to just be used as a calling card. We actually want customers to resonate with the value that we provide them.”
Analysts project that by December 2028 the market will reach 10-million SIMs. Moreover, the entry of large retail brands could further propel growth, potentially elevating the market to 13.5-million SIMs.
Since most people use the WhatsApp messaging service, FNB Connect provides unlimited access to the platform for customers. It also offers eBucks rewards and sells mobile devices at a discount for customers. “We offer full flexibility for customers. Our plans are month to month. So, like this, full flexibility on our SIM plans. So customers actually choose to be with us. You're not locked in,” Sookroo said.
FNB recently introduced a virtual SIM card — eSIM — which Sookro said would further enhance the digital experience for customers by speeding up time between sign-up and activation. “We’ve seen an overwhelming number of our rail and commercial banking customers connect to the FNB App through eSIM-ready devices,” he said.
“In fact, the number of FNB customers with eSIM-enabled smartphones has grown by 169% in the past three years. Moreover, we expect these numbers to grow further as eSIM-enabled devices become more readily available across more devices with more affordable price points.”
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