FNB Connect welcomes MVNO explosion

FNB Connect CEO Sashin Sookroo has welcomed growing competition in the mobile virtual network operator (MVNO) market.

From a consumer’s perspective, MVNOs work like regular mobile network operators (MNOs) but don’t have any of their own connectivity infrastructure.

They offer their customers cellular services through roaming agreements with MNOs.

An MVNO is often part of another business — like a grocery retailer, bank, or clothing store.

That business can use some of the assets and resources of its other offerings to draw customers to its MVNO services and vice versa.

With 879,000 active SIMs in 2022 and a target of one million in the near future, FNB Connect is likely to be the largest MVNO in South Africa.

However, the past few years have seen the launches of several new MVNOs and the rollout of attractive new MVNO products — including unlimited calling plans and large data bundles at highly competitive pricing.

Most MVNOs in South Africa run on Cell C’s network, as it was the only operator with a platform supporting this capability for several years.

However, the launch of MTN’s MVNO offering in 2020 has enabled new players with attractive packages on the country’s second-biggest network — including Melon Mobile, TFG Connect, and Pick n Pay Mobile.

MyBroadband recently spoke to Sookroo to learn more about how these developments have impacted FNB Connect.

While he did not provide specific figures, Sookroo said that FNB Connect had seen strong customer growth over the past year.

He believes that expansion in the MVNO market has played a part in this.

“I think the advent of more MVNOs and more competition has actually got customers thinking about what they are missing out on,” Sookroo said.

“There has actually more uptake on our side [than before other MVNOs launched].”

Sookroo said that FNB Connect’s fundamental difference was that its customers were also banked clients.

“One part you can look at is the customer acquisition, but the real litmus test is the retention [rate] and whether customers are seeing your value proposition,” Sookroo said.

“We value people who transact, we value people who use. We don’t just want a [high] number [of customers]. We actually focus a large portion of our strategy on quality.”

Sookroo said that this focus has yielded positive results. “You really see customers taking up and staying with the product.”

In terms of connectivity, FNB adding MTN as a roaming partner substantially increased its coverage.

FNB Connect customers also enjoy additional value through the bank’s eBucks programme.

“We’ve rewarded over 600 million in free Connect data and minutes,” Sookroo said.

“Over 75% of our customers save significantly through our value and bundle offerings. They save from R270 per month.”

Taking the fight to new MVNOs

MVNOs competing with FNB Connect have launched some of the best value-for-money offerings of any operators in the country.

Melon Mobile’s catalogue includes unlimited calling plans bundled with mobile data starting at R199 per month with 5GB anytime data.

This makes FNB Connect’s Talk Max plans, priced from R325 per month without any mobile data, seem expensive.

Afrihost Air Mobile, Capitec Connect, and Shoprite K’nect’s mobile data prices also undercut major MNOs and FNB Connect, particularly when it comes to large bundles.

For example, Afrihost Air Mobile charges R30 for a 60-day 1GB bundle, whereas FNB Connect’s monthly 1GB bundle costs R59.

MyBroadband asked Sookroo how FNB Connect planned to compete with these MVNOs gaining traction in the market.

Sookroo suggested that FNB Connect planned to launch new offerings on the back of its strengthened network quality and coverage.

“What you can look out for is higher value telco offerings. Not just lower price, but higher value, and more affordable SIMs and devices,” Sookroo said.

In addition, FNB Connect customers will benefit more from the bank’s existing and new partnerships, suggesting better value-added rewards are on the horizon.

Sookroo added that adding the ability for customers to sign up to FNB Connect with an eSIM was also top-of-mind for the MVNO and would launch “soon”.