FNB goes mobile: the inside story - TechCentral

FNB goes mobile: the inside story

Ravesh Ramlakan

Ravesh Ramlakan

On 15 June, First National Bank will become the first major banking brand in South Africa to launch a mobile virtual network operator and take on South Africa’s incumbent mobile operators.

Years in the making, FNB is hoping to sign up hundreds of thousands of its clients to the new service, which will offer both prepaid and post-paid products. The service is available only to FNB customers.

The bank, which has been running a pilot since last November with thousands of its employees, will integrate its mobile offering — to be branded FNB Connect — tightly with its online and cellphone banking platforms and with its eBucks rewards programme.

TechCentral has been testing the network under a non-disclosure agreement and embargo since earlier this week. The NDA was lifted on Thursday after another website published leaked information before the official launch, which was set for next Tuesday.

[View FNB Connect’s full pricing]

In a detailed interview with TechCentral earlier this week, FNB Connect CEO Ravesh Ramlakan explained why the bank has decided to enter South Africa’s competitive mobile market with an offering of its own.

Ramlakan said FNB has been selling a wide range of telecoms products for some time. Indeed, the company has its own telecoms licences from communications regulator Icasa.

“We already sell prepaid airtime top-ups, cellphone contracts, devices, voice over IP, 3G data rewards, etc. After we analysed it, we realised the most obvious thing to do next is to offer our own Sim where we can control the customer experience,” he said.

“We have over 2m people topping up airtime with us and have sold over 250 000 devices to date. This stuff is not new to us.”

It’s taken a long time to bring the product to market, though, because, he said, the bank wanted to ensure there was deep integration with its online banking systems and to ensure the product was ready to bring to market.

It has developed its own billing and support platforms. This required complex back-end development, Ramlakan said. The system is fully integrated with FNB’s mainframe-based core banking platform, Hogan.

Ramlakan denied suggestions that the reasons for the delays in launching the offering were because of concerns about the quality of partner Cell C’s network.

Cell C has previously admitted it has had problems, especially in Gauteng, but said recently that these issues have now been resolved.

“We’ve been testing it from November with a few thousand staff around the country and the response has been quite positive,” Ramlakan said.

He emphasised, however, that FNB is not tied to one partner network. “Our platform is network agnostic and we could easily put another operator in there in future.”

Though both Vodacom and MTN have resisted working with third parties to launch MVNOs, Ramlakan believes the launch of FNB Connect could prompt a change in approach.

“The incumbent operators are always resistant, but once you take one and launch, the other guys become more amicable to it,” he said.

FNB has access to Cell C’s full network, including its 2G and 3G infrastructure. It will also have access to its 4G/LTE network when this is launched later this year.

When customers apply for an FNB Connect Sim, the bank is able to do customer scoring on the fly, Ramlakan said. Customers also do not need to Rica their Sims as FNB already has that information through the Fica regulatory process.

Key to FNB’s offering could prove to be its tight integration with eBucks, FNB’s very successful loyalty rewards programme. FNB Connect users will get between 15% and 40% of their mobile spend back in the form of eBucks, depending on the rewards level they are on.

FNB Connect is tightly integrated into the bank's online banking platform

FNB Connect is tightly integrated into the bank’s online banking platform

Ramlakan said FNB Connect is not meant as a profit centre for the bank, but rather as a means of rewarding customer loyalty and attracting new customers.

In a pointed departure from the approach to contracts taken by South Africa’s two big mobile operators, FNB will separate the cost of the Sim and airtime from the cost of the device.

Customers will pay separately for each. They can use either their own device, or buy one from the bank, which they can then pay back over a period of time.

Prices are in line with what’s available from other operators, with the prepaid per-minute charge set at 95c/minute (on per-second billing). Prepaid data is a pricey R2/MB, but FNB, like other operators, wants to encourage users to buy data bundles.

Prepaid users get 50MB of free data per month, but to be eligible they must register their FNB Sims for inContact or cellphone banking or have a cumulative monthly airtime spend of at least R35.

The bank is also offering month-to-month contract plans called Flexi, where users can choose their own bundles of voice, data and SMS to build a package suitable to them.

The Flexi plans will also allow customers to use the FNB Banking App to make free calls to other app users and pay 39c/minute for calls to someone on another network. These calls are placed over the Internet, so a good quality connection is needed and data charges will apply.

Ad hoc voice bundles started at R35 for minutes and go up to R700 for a thousand minutes. It’s R140 for 200 minutes and R245 for 350 minutes.

Ad hoc data bundles start at R15 for 50MB and go up to R245 for 2GB. 100MB (R28), 300MB (R75), 500MB (R95) and 1GB (R145) are also available.

FNB is also offering a 24-month Connect Data contract, with prices started at R35/month for 500MB and going up to R245/month for 5GB (plus an additional 5GB for use between midnight and 5am).

Customers manage their Sims and their telecoms spend through the FNB website, where a new tab will give them access to a range of telecoms features. The head of a household, for example, will be able to manage all the Sims in a home and what limits apply to each.

If someone misplaces a Sim, they can block it with the click of a button. If they then find it again, they can log on and reactivate it. Sim swaps can also be done online, with the new Sim delivered free of charge.

Those wanting to port their number from another network can do this automatically without the need for any paperwork, Ramlakan said. Porting can take up to 24 hours, but is usually done in about four or five hours.

The system also provides real-time billing through the website on all Sim types, including prepaid.

Prepaid users can elect to top up automatically by a set amount to avoid calls being cut off because they’ve run out of airtime. This can be set up for data as well.

Ramlakan said FNB is targeting those with an income of between R100 000 and R500 000 per year.

“For launch, we want to focus on the middle-income market and test our volumes for sales distribution. More products will come after launch,” he said.  – © 2015 NewsCentral Media

13 Comments

  1. Expensive… If the bank wants to attract new customers cut down on your banking . I bank with capitec and practically my banking cost are zero due to a nice interesT.. consumers are blind… I am happy with Telkom Mobile sim sonke unlimited calls to other telkom mobile members for only R20 per Week. Their prices are expenses. Me to You mobile looks much better on prepaid

  2. Graeme Donaldson on

    My FNB account costs R199/month. I earn eBucks to the value of around R400 every month, which is from normal spending I would’ve done anyway i.e. Checkers, Takealot, petrol, etc. So I guess my banking costs are negative. A little better than zero. 🙂

  3. Greg Mahlknecht on

    I’m a big eBucks fan and think FNB’s okay as a bank but their business model certainly is to mark up over normal prices by 20%.

    One just needs to be aware of it, and like anything in life, assume anything that any marketer ever tells you is an absolute lie and do your homework before buying 🙂

  4. depending on your salary – Capitec is a good way to go if you’re earning less than R10k a month. if you earn R16,500/month or more then nothing beats FNB platinum! As Graeme has indicated he gets back R400/month, I get back between R1500 and R2000/month. Do consider that level 5 customers will get 40% back of their bill on ebucks. level 5 customers also get 40% off what they buy in the ebucks store. This equates to 66% back or you effectively only pay 1 third of the listed price (I will elaborate on the math if this is not clear). Keep that in mind when comparing contract prices with other providers.

  5. Greg Mahlknecht on

    > This equates to 66% back or you effectively only pay 1 third of the listed price

    Please elaborate.. I’m not following you here.

    The “40% off” is a bit of marketing redirection; it’s only a very small subset of the eBucks store that you get 40% off of. There are tips and tricks to this though – you can get 40% off yuppiechef and Makro vouchers, so can effectively get 40% discounts off large varieties of products that way.

    As I said in a previous post – assume all marketers are liars (well they are, that’s basically their job, isn’t it?) .. and then look for the loopholes 🙂

  6. I’ve used FNB since before it was FNB and wonder if I need my head read. It costs lots more per month that the R199 listed below. I have had ebucks for quite a few years and have earned exactly zero despite using my card extensively. after years I got a notification that the ebucks linked to my business account had been broken but they had now fixed it now and sent a new card. Since then, last year, I have earned exactly zero despite getting the new card swiped at Macro and IC. Phone them you say… Let’s not count the times. I can list more examples of complete incompetence… Am I the only one? Please fix the old before parading the new.

  7. The idea is that you use your ebucks only on the items listed as discounts. there are many practical options like Makro but i prefer to convert to grocery vouchers.
    Since checkers is a big ebucks partner there vouchers are always going for 40% off on the ebucks store, so by converting your earned ebucks into checkers vouchers you effectively get 66% back on whatever you spend on FNB connect in the form of Free groceries. Just to clear up the maths –

    40% back on R1 is R0.4 or 4 ebucks.
    40% off on the ebucks shop means that that with 4 ebucks i can buy 4/0.6 = 6.66 Ebucks worth of goods valued at R0.66.
    Therefore you get R0.66 back per R1 spend in the form of discounted vouchers. You effectively only pay a third of the price.

    If you are already banking with FNB and getting ebucks already then there is zero additional work to set this up.

  8. Wayne Gemmell on

    After spending the weekend on holiday with no data because CellC doesn’t have a data roaming agreement with Vodacom, I have to wonder why anyone would want to partner with them. I’m really looking forward to porting away from them later this month.

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