Sashin Sookroo, CEO of FNB Connect.
Electronic-SIMs (eSIMs) are “definitely” a technology for the future and it’s just a matter of time before they become mainstream, says Sashin Sookroo, CEO of FNB Connect.
Sookroo spoke to ITWeb in a wide-ranging interview, detailing FNB Connect’s future as it marked 10 years in June, the competitive landscape in the mobile virtual network operator (MVNO) market, bridging the digital divide through connectivity and affordable devices.
FNB Connect is a three-pillar business made up of the MVNO, device and service provider business. Last year, the business went live with its eSIM solution for its retail and commercial customers.
Asked if eSIM technology will soon outpace original SIMs in the local market, Sookroo said this should be the case over time. “With any new technology there’s an adoption curve, so it’s a question of how quickly that adoption will happen.
“If you look at South African consumers, they are mobile – they’re using mobile phones and we see it with the app usage. There’s potential; it’s just about technology adoption and how long or how quickly eSIMs become mainstream.”
While eSIMs used to be in all the high-end, premium devices, Sookroo explained that manufacturers are now targeting mid-entry devices.
“There’s an active race on these entry-level devices as well,” he stated. “We believe that as those start to come into the market, over a period, we’ll see a massive growth in eSIM adoption and usage.”
An eSIM is a form of SIM card that is embedded directly into a device. Instead of an integrated circuit located on a removable SIM card, typically made of PVC, an eSIM consists of software installed onto a chip permanently attached to a device.
eSIMs are not new to the South African market, with local operators MTN, Telkom and Vodacom, and MVNO player Melon Mobile offering eSIM support and solutions.
Globally, embedded SIM cards have already been included in a wide range of newer high-end iOS and Android phone models, including Apple, Samsung, Motorola, Huawei, Oppo and Sony.
eSIMs 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.
In addition, eSIMs have been punted as an 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.
The big-four bank’s MVNO offering launchedin 2015, allowing FNB customers to choose from a range of contract and prepaid packages, smartphones and devices.
FNB Connect’s device proposition has expanded beyond smartphones, smart devices and home connectivity, to solar solutions for the home and business, as well as water harvesting and backup solutions, revealed Sookroo.
It continues to witness demand for voice, data and unlimited WhatsApp plans as part of its product offerings, he added.
In terms of the customer base, he said it uses the definition of “true active” to determine the number of users. FNB Connect’s true active base sits at just under one million users, while the active base is “doing well”.
“Our customers love data and they’re looking for an affordable smartphone…we’ve even got refurbished phones on our platform.” These include highly-aspirational phones like the iPhone.
In recent years, the local MVNO market has been inundated with product offerings from banks, retailers, telcos and insurance providers.
According to a report by local market analyst firm BMIT, the collective market share of MVNOs will double in the next two to three years and account for 10% to 12% of mobile subscribers in five years.
FNB was the first local bank to establish an MVNO, and Sookroo commented that the growing competition in this space is welcomed and serves as motivation for the bank.
“We innovated and piloted in the space. In the 10 years, there was a period when we had a tough time as the network quality wasn’t the greatest. For the last two years, through our relationships with our network partners (MTN and Cell C), we now have the best networking coverage. We now think we are very well-positioned in the market.
“From a competition perspective, we’re loving it. The more MVNOs that can come onboard, the better. In addition, we’re very keen to partner. So, we’ve learned a lot in this space over 10 years, and it also primes us to know a lot on what works, what doesn’t, how to set up differently. We’re open to partner in this space and help the other MVNOs with some of their offerings or services.”
