Nearly two years after introducing eSIM capability, mobile virtual network operator (MVNO) FNB Connect is witnessing sales volume gains.
FNB Connect’s eSIM offering now makes up 10% of the MVNO’s sales volumes, says CEO Sashin Sookroo, speaking to ITWeb in an interview.
In November 2024, FNB Connect became the first bank-owned MVNO to launch eSIM support for its retail and commercial customers.
Sookroo tells ITWeb that customers are increasingly choosing eSIM capability. “For our eSIM-enabled devices, our sales are up 96% year-on-year, supported by strong voice and data growth over the past six months.
“Customers don’t need to wait. They don’t need to visit us but can, from the comfort of their home, join Connect instantaneously, and then start using the eSIM.”
An eSIM is a digital SIM that allows users to activate their tariff plan from a carrier without having to use a physical SIM. It is embedded directly into the hardware of a smartphone device.
eSIMs are not new to the South African market, with telcos MTN, Telkom and Vodacom, and MVNO player Melon Mobile offering eSIM support and solutions.
They have been touted as a game-changer in phone connectivity, with experts saying this will play an important role in accelerating the local MVNO market.
Local telcos are also punting eSIMs as a more environmentally-friendly alternative given the environmental challenges caused by physical SIM cards. It’s estimated that reducing the number of SIM cards distributed in SA each year could lead to an annual reduction of almost 190 tonnes of plastic waste, based on a recent calculation by Securi-Tech.
Further to the environmental impact, South African lawmakers previously flagged the proliferation of plastic SIM cards in the country, questioning the enforcement of the law that governs access to SIMs. This, as physical SIMs are increasingly linked to nefarious acts.
MVNOs heat up
FNB Connect launched as an MVNO in June 2015.Last year, it crossed the one million user mark.
It now considers itself a three-pillar business, made up of the MVNO, device and service provider business, with a portfolio that includes smartphones and laptops, smart home, solar and lifestyle technology solutions, such as robot vacuums, automated pet feeders, blood pressure monitors, fitness watches and water backup solutions (Jojo tanks).
According to Sookroo, Connect is shifting from just being a mobile add-on for customers, to a “material contributor” to FirstRand Group’s results.
“Our FNB Connect revenue has been increasing, which indicates that customers aren’t just signing up; they’re actively using the service,” he says.
“We’ve been intentional about focusing on customer needs, which has resulted in disproportionate usage for Connect and its services.”
Highlighting some of the usage gains, the CEO revealed that customers have used 26 million GB (26 petabytes) of data, which is over 180% year-on-year data growth. FNB Connect customers have used 1.2 billion voice minutes, he states.
A report by local market analyst firm BMIT states the collective market share of MVNOs will account for 10% to 12% of mobile subscribers in five years.
In addition, research from Omdia projects thateSIM technology will drive adoption in internet of things devices, reaching 3.6 billion in 2030.
Players in the local MVNO space include banks, telcos, retail and JSE-listed tech firms.
The FNB Connect CEO welcomes the competition in the market, highlighting the MVNO’s domestic and global eSIM solutions as key differentiators to what is already out there.
“Even when you’re abroad, FNB Connect is still relevant to your travels, so you don’t incur data roaming costs and your spend becomes predictable.
“The MVNO growth rate is encouraging and we’re also here to support other MVNOs. Telecommunications spend and devices are an essential part of customers’ lives, so we must think about generating and ensuring customer value.
“When you consider the industry and the players that are enabling these ecosystems…the growth is there. There will be some winners and losers, refinement of strategies and a lot of flux in the market. If anything, we will see it accelerate even more.
“We welcome the growth and competition…it helps customers make choices that they value.”
Sookroo notes customers can next expect “more value, simplicity and deeper integration” into how they live and transact. “This includes a continued focus on data value, easier onboarding with instant access, and products designed around real customer behaviour rather than complexity.
“Ultimately, FNB Connect isn’t just about selling SIM cards. It’s about removing the barriers that stop people from fully participating in the digital economy, through devices, data and access.”
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