South Africa’s largest banks are no longer competing just for customer deposits and loan portfolios. Over the past decade, they have quietly built a parallel business that blurs the traditional line between financial services and telecommunications. First National Bank, Capitec, Standard Bank, and Nedbank have all launched mobile virtual network operator (MVNO) businesses, and now Absa is preparing to join them in what many analysts view as a fundamental reshaping of the continent’s banking landscape.
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The shift reflects a strategic pivot that transcends simple revenue diversification. South Africa’s major lenders increasingly see connectivity and mobile services as embedded infrastructure within their broader banking ecosystems, not as standalone products for selling airtime and data bundles. FNB Connect, the bank’s MVNO, has evolved into what executives describe as a customer engagement platform and data-driven business contributor to non-interest revenue streams.
According to FNB Connect CEO Sashin Sookroo, the transformation runs deeper than traditional MVNO operations. The bank views the service as a mechanism for acquiring customers, deepening engagement across multiple digital touchpoints, and building what the financial industry calls ecosystem-led banking. Device sales alone exceeded R600 million in recent performance metrics. More significantly, customers using both banking and telecom services from the same institution demonstrate substantially higher retention rates, lower propensity to switch providers, and greater lifetime value compared to single-product customers.
This pattern is emerging consistently across South Africa’s banking sector, signaling that connectivity is no longer an add-on feature but rather foundational infrastructure for modern banking itself. The planned entry of Absa into the MVNO market will effectively complete the circle among major retail banks, making South African banking a testing ground for what continental financial institutions might look like in the next decade.
The scale of this transition is hard to overstate. South Africa’s MVNO market is projected to grow from 4.4 million active SIMs in 2025 to 14.4 million by 2030, driven largely by these banking MVNOs. Industry observers suggest the country’s experience with ecosystem-led banking could provide an early blueprint for how banks across Africa deepen customer loyalty, expand beyond traditional financial services, and compete effectively against telecom operators who have historically maintained closer customer relationships through daily connectivity services.
Banks like FNB are now describing themselves as platforms rather than traditional financial institutions. The bank is embedding itself in customers’ everyday digital interactions by blending financial services, telecom, retail commerce, and digital payment capabilities. This positioning allows institutions to produce, aggregate, and distribute value across interconnected ecosystems in ways traditional banking models cannot replicate.
Nedbank is pursuing a similar strategic direction, recognizing that high data costs have created a critical pain point for customers. By integrating connectivity services with its broader ecosystem, including rewards programs and digital banking channels, the bank aims to enhance daily value for customers while simultaneously deepening relationships and supporting their digital lives.
The South African experiment demonstrates that in saturated banking markets with slowing loan growth and compressed margins, the highest-value competitive advantage lies not in balance sheet strength but in controlling the digital infrastructure customers interact with every day. Banks that build this infrastructure first will likely dominate the next generation of African financial services.
