Capitec Connect, the burgeoning mobile virtual network operator (MVNO) launched by South African bank Capitec, is pursuing tighter integration with Cell C, the mobile network on which it piggybacks.
So said Dr Dalene Steyn, head of Capitec Connect, in an interview with ITWeb TV, saying the move aims to strengthen its position in the competitive MVNO landscape, leveraging its banking customer base, while capitalising on Cell C’s network infrastructure and evolving wholesale strategy.
“We launched about two-and-a-half years ago and we are one of the fairly young MVNOs in South Africa,” she said.
“We didn’t launch Capitec Connect to be the biggest telco in South Africa, but we launched it for Capitec to become a better bank. We felt that the big telcos were exploiting our customers – they were charging really exorbitant prices for data.”
Steyn pointed out that these charges were confusing and did not conform to the Capitec fundamentals of being “simplistic, accessible and affordable”.
“We’ve got about 1.7 million subscribers at the moment and the plan is to double that in the next year.”
According to Steyn, Capitec has about 24 million clients and the MVNO is looking to tap into that clientele base to boost its subscriber base.
“Ideally, we would want each and every Capitec client to have a Capitec Connect SIM card. That’s our ultimate target, but we want to double our subscriber base in the next year.
“We’ve got about 12 million of our clients who buy airtime through Capitec every month. Capitec is actually the biggest seller of airtime in the country. I think we sell about 41% of all airtime in South Africa, mostly from our app.
“We know exactly who those clients are; we know exactly what they are buying and those are the clients that we will be targeting.”
She explained that this year’s focus is on moving the customers from whichever mobile network operator they currently use to Capitec Connect, as the company believes it offers a simpler, more accessible and more affordable solution.
Happy partnership
Although there are several mobile virtual network operator enablement platforms mushrooming in SA, Steyn said at the moment, Capitec Connect is content with Cell C.
Recently, MTN, Vodacom, Telkom and investment firm Huge Group launched their own enablement platforms to challenge Cell C.
“Right now, we are very happy with working with Cell C and we are working at getting more tightly integrated with Cell C. It will be possible in future to have a dual mobile network operator (MNO), or to switch, but currently we are very happy with the partnership that we have with Cell C.
Cell C CEO Jorge Mendes recently mentioned that the telco is targeting to launch a 5G network in the coming months.
Commenting on the arrival of the next-gen connectivity solution, Steyn said: “We are very aligned with Cell C; we know what’s exactly on their road map and they know what’s exactly on our roadmap.
“Cell C often launches a new product into their retail channel first and then makes it available to their MNVO partners,” she said, adding that as soon as the MNO switches on its 5G network, Capitec Connect users will get the benefits.
“We’ve a got a good relationship with our MNO, which is Cell C, and they are always keen to come to the party because we formed a great mutually-beneficial partnership. The partnership helped us to build and design products that are focused on giving clients the most affordable solutions.
“We didn’t start Capitec Connect to become a massive income stream for the bank, but we are already contributing nicely to the income. The purpose was always to make Capitec a better bank. How do we do that? By serving our clients better.”
Digital versus cash
She noted that Capitec Connect is mostly helping the bank’s clients to transact digitally. “Our CEO Gerrie Fourie always says when clients withdraw their money as cash, we don’t know what they will do with the money. We don’t know where they are spending the money and we don’t know how to better help them.
“We want our clients to use our app; we want them to use our card to tap and swipe so that we get to know where the money is going and be able to help the customers better.
She revealed that the use of artificial intelligence is on Capitec Connect’s roadmap for next year. “I don’t think we have begun to scratch the surface; there are a lot of use cases and there is a lot more potential for artificial intelligence that we will be getting into over the coming months.
“We want to be completely transparent. There will never be an asterisk or even things like night time data. I think it’s something clients buy but don’t use. We try and sell clients something they really want.”
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