FNB Bank signs agreement with MTN to supply Connect Services

South Africa’s second-largest bank by customer base, First National Bank (FNB) has entered into partnership agreement with MTN South Africa for the supply of network services for FNB Connect, its mobile virtual network operator (MVNO).

As part of the agreement, First National Bank will retain Cell C as a supplier of network services, with FNB Connect opting for a dual-supplier strategy.

In a joint statement, FNB and MTN said they have formed a strategic network collaboration aimed at accelerating access to reliable telecommunications and internet services for customers who use FNB Connect.

Jacques Celliers, the Chief Executive Officer (CEO) of First National Bank in the statement stated that the addition of MTN as a network partner “allows customers to enjoy the best of both worlds in network quality”.

“Telecoms and ICT services are central to the integrated value propositions we offer our customers across financial and lifestyle services” he said.

Jacques Celliers disclosed that his outfit will come out with more innovative services in the coming months to help drive the needs of customers.

“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. This includes internet-of-things solutions that empower businesses to improve efficiency and productivity.”

The CEO added saying “We will also offer fibre, 5G and LTE for faster internet speeds and reliable connectivity for both residential and commercial customers”.

MVNO Value Increase

Meanwhile, the South African MVNO industry has seen its value increase over the last few years, causing mobile network operators’ interest in offering the services to surge. FNB stated that its MVNO sold about R400-million in smartphones and other digital devices in the first half of the year. In September 2022, MTN announced its push into the business, stating that it would offer services to the likes of Mr. Price Mobile.

Commenting on the Cell C deal, Cell C’s Chief Officer for wholesale business, Stephen Morony, disclosed that the operator has signed a multi-year extension of its existing agreement with FNB Connect, which now has a “dual-vendor strategy”. FNB remains a strategic partner, Morony said.

FNB Connect already has an MVNO partnership with Cell C, which was the first mobile network operator in South Africa to introduce MVNO services. According to FNB, the Cell C partnership will run concurrently with the new MTN partnership to “[allow] customers to enjoy the best of both worlds in network quality”.

“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 South African consumer” he indicated.

MTN South Africa CEO Charles Molapisi noted that the company is growing that part of the business quite significantly.

“We are building an MVNO platform as a service. We have a huge pipeline of MVNOs who want to come on board. We are open for business when it comes to MVNO. We will add far more than three.”

MVNOs like FNB Connect piggyback on networks built by network operators, leveraging their brands to lure consumers and complement their existing propositions. Retailers and banks in South Africa have shown particular interest in the MVNO model.