FNB Connect broadens device push as data usage surges

FNB Connect plans to expand its digital device portfolio and pre-owned smartphone offering as it targets further growth in a business benefiting from rising demand for data and technology.

The bank’s digital services unit, which includes its mobile virtual network operator (MVNO), increased revenue 14% year on year to more than R3bn in its latest financial results. Transaction volumes processed through Connect, including device purchases, solar products and airtime, rose about 18% to R28.6bn.

Data usage was among the strongest growth drivers, increasing 85.3% year on year to about 50 petabytes. FNB Connect now has just over one million MVNO customers, while its broader digital services customer base has reached about three million.

FNB Connect is one of more than 20 MVNOs operating in South Africa, using existing mobile network infrastructure to provide branded voice and data services. The sector includes banks, with the exception of Absa, as well as insurers and food and clothing retailers.

CEO Sashin Sookroo said the business still had significant growth potential across its MVNO, device and digital services operations. “We’ve got lots of runway in all our businesses in Connect, so the MVNO, the device and digital services,” he said.

Demand for devices remains strong despite pressure on household budgets. Device sales volumes increased 18.4% during the year, while cash sales of devices more than doubled.

Sookroo said affordability was becoming increasingly important as smartphone prices rise, creating opportunities in the refurbished device market. FNB Connect already sells refurbished iPhones, including models priced below R5,000, and plans to broaden the range.

“It’s quite a popular product for us, and we will always look at expanding that range. It’s actually one of the ranges that performs quite well,” he said.

The company is also exploring ways for customers to trade in older devices through FNB Connect, although details have yet to be finalised.

Beyond smartphones, Connect has expanded into laptops, tablets, gaming products, fitness devices and home solutions such as solar and water-backup systems. It recently added JBL products and has introduced premium brands, including Bang & Olufsen and Dyson. “We constantly look at what consumers want. We will definitely add more,” Sookroo said.

The strategy aims to make technology more accessible through multiple payment options, including cash, instalments, eBucks and rewards programmes. Lower-cost devices and health-and-fitness products are among the strongest-performing categories.

Another fast-growing segment is eSIM technology. Local eSIM volumes increased 144% year on year, while global eSIM volumes rose 717%. Around 30% of FNB Connect’s digital sales are now eSIM-related.

While data consumption continues to grow rapidly, Sookroo said voice services remain relevant, particularly for calls to businesses and service providers. “Customers are very, very data hungry,” he said, but added that data-based communication had not displaced traditional voice services.

Consumer behaviour is also becoming more complex. FNB Connect recorded a 247% increase in recharges through its network of more than 170,000 retail points, suggesting customers continue to move between digital and physical channels. “We’re digital first, but we also have human-assisted processes when customers need it,” Sookroo said.

The company has also added prepaid advance service, which allows qualifying customers to access airtime, data and voice bundles and repay the advance through future recharges.

The longer-term opportunity for Connect extends beyond subscriber growth. Sookroo said the business is focused on active customer engagement rather than headline user numbers, particularly in an MVNO market where many consumers maintain multiple SIM cards. “We’re not necessarily just chasing that number,” he said. “We want you to actually engage, use it and experience the value that we offer.”

Over the next three to five years, Sookroo expects growth to come from a combination of connectivity, digital services and devices as technology becomes increasingly central to consumers’ work, education and everyday lives. The challenge will be converting that demand into sustained engagement while keeping devices and connectivity affordable.

Business Times