Standard Bank. Picture: FINANCIAL MAIL
Standard Bank. Picture: FINANCIAL MAIL

Standard Bank on Wednesday became the second major bank in SA to offer its customers mobile communication services using Cell C’s infrastructure.

Standard Bank Mobile would offer the bank’s customers rewards such as free data when they swiped their cards, the financial institution said.

The bank has become the 19th entity to launch a mobile virtual network operator (MVNO) service on Cell C’s network.

Others include Virgin Mobile, MRP Mobile, and FNB Connect — which already has more than 600,000 subscribers after its launch in mid-2015. 

MVNOs — entities that buy and resell connectivity from network providers — now account for about 3% of the overall South African market by revenues, according to Cell C’s estimates.

“The model is gaining momentum locally as big brands, like Standard Bank, come on board and more businesses seek new revenue streams,” said Björn Flormann, CEO of Cell C’s wholesale business.

The MVNO model allows businesses such as banks and retailers to provide niche offerings to their customers without having to invest in their own network infrastructure.

Of Cell C’s 16.3-million subscribers, as of mid-2018, 1.7-million were MVNO customers. In the six months to end-June, Cell C’s wholesale revenues jumped 51% to R486m, or 7% of total service revenues.

Fitch Solutions said in October other banks could follow FNB and Standard Bank’s lead amid the “growing convergence between telecoms services and retail banking in SA”.

MTN said last week it planned to relaunch mobile money services in SA in the first quarter of 2019.

“We believe that Standard Bank’s MVNO move is well timed, particularly as mobile network operators have shown renewed interest in… offering more advanced financial products and services,” Fitch Solutions said in a note.

Standard Bank had 8.1-million active customers in SA in June, which meant its mobile business had access to a “large potential mobile subscriber base”.

However, Fitch Solutions said the MVNO market was crowded and the bank would need to differentiate its offering.

hedleyn@businesslive.co.za