Standard Bank said to be building an MVNO - TechCentral

Standard Bank said to be building an MVNO

Standard Bank is building a mobile virtual network operator (MVNO), according to well-placed industry sources. The bank has hired former Virgin Mobile South Africa CEO Steve Bailey to its executive team.

Standard Bank is also aggressively hiring telecommunications skills, TechCentral has learnt.

If it goes ahead with the MVNO, Standard Bank will be the second big retail bank in South Africa to launch a virtual operator following the introduction of FNB Connect in 2015. It will, however, mark an about-turn from its previous views about launching an MVNO.

A bank spokesman said it is not able to comment. Bailey, whose LinkedIn profile shows he joined Standard Bank late last year, also said he could not comment.

MVNOs piggyback on existing networks’ infrastructure, but typically provide their own backend billing and customer support. FNB uses Cell C’s network. Other MVNOs include Virgin Mobile and Mr Price Mobile.

Before joining Standard Bank, Bailey was CEO of MVN-X, a virtual mobile “enablement” company that launched MVNOs such as Mr Price Mobile, X Mobile, Smart Mobile and Me&You Mobile. He was CEO of Virgin Mobile South Africa between 2008 and 2012 and before that was chief customer operations officer at Cell C.

While it’s not known who Standard Bank might be working with, market talk is that it may have partnered with Vodacom, though this could not be verified. A Vodacom spokesman said the company won’t comment on speculation. To date, only Cell C has worked with MVNO partners. The company offers a platform on top of which MVNOs are able to provide services.

In 2016, former MTN CEO Phuthuma Nhleko said that a large financial services institution would launch an MVNO on MTN South Africa’s network. That never transpired.

In an interview with TechCentral later that same year, Standard Bank’s chief executive for personal and business banking, Peter Schlebusch, said that although the bank had looked at the MVNO model “extensively” it had decided against it.

About-turn?

“There are a lot of competent players in the telecoms space already,” Schlebusch said at the time. “FNB, clearly, has taken a different view, and they have their own reasons.”

He said the bank wanted to focus on delivering a “fantastic customer experience in banking and financial services”, rather than being side-tracked by a venture into telecoms.

To launch an MVNO, Standard Bank would have to commit to high fixed costs upfront. The problem, Schlebusch said, was that “you’re not sure how many customers are going to come across to your platform”. And the market “can be quite saturated at the top”.

It now appears to have changed its thinking on a venture in the telecoms market.

Standard Bank has the largest retail customer base of any bank in South Africa, with 11.8m clients as of December 2016, ahead of next biggest rival Absa with 8.8m and Capitec with 8.3m. That’s a rich seam of clients into which the bank could sell mobile services.  — © 2018 NewsCentral Media

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