Capitec chief executive officer Gerrie Fourie, says that the bank is not shopping around for a stake in Cell C, and instead wants to build on the success of its mobile virtual network operator (MVNO), Capitec Connect.
To this end, the group wants to put a stong focus on disrupting the mobile data space, while also expanding its partnerships for roaming.
Reporting its half-year results for the period ending August 2023, Capitec showed strong growth in its businesses due, in large part, to the group’s strategy of pushing past just lending and transactional income into more diversified fields such as insurance and current and new value-added services.
Through diversification, almost half of Capitec’s income is now sourced outside its lending business.
One of these new business avenues is Capitec Connect, which launched as an MVNO on Cell C’s network in September 2022.
According to the bank, it currently has 1.3 million Capitec Connect SIMs in distribution. The bank is drawing an average revenue per user (ARPU) of R77 per month.
“It’s coming from a very small base, coming from about 120,000 cards per month, which is nice,” Fourie said.
“For me, it’s not about the money; it’s about being different in the telecoms space – and about data. Data for us is the long-term play. We just understand our clients a bit better, we can offer value.”
Capitec launched its mobile offering with the same simplified approach it takes with its banking products, offering one simple prepaid package: R45 per GB, 90c per minute, and 25c per SMS.
The group launched its second data offering earlier this month – a 10GB package for R199, undercutting prevailing prices for the same package by half in most cases.
Given the successes Capitec is seeing in mobile – and the clear desire from the executive team to expand these services to tap into future growth for the bank – BusinessTech asked Fourie whether or not the group would go full-swing and look at making a bigger play.
Earlier in September, Blue Label Telecoms executives Mark and Brett Levy, said that they were keen to find a new “strategic investor” to buy into Cell C, which is still struggling through its restructuring.
However, Fourie said this is not really the play for Capitec.
“What makes us different is our ability to focus – we are focused on our clients and the needs of our clients. As soon as you start focusing on things that you don’t know much about – like running a full telecoms business – that’s not our core,” he said.
However, he said that Capitec will still look for opportunities in the space, including expanding partnerships.
“We would rather look at how we can partner and use Cell C to create value for our clients and sell those products to our client base rather than running a telecoms company.”
MTN and Cell C are currently the only telecoms offering MVNO services. Fourie said that, like FNB Connect broadening its roaming agreements with the likes of MTN, this is something Capitec will also consider.