Banking on your phone for a song

MTN muscled in on the banking space several years ago, but today FNB has moved into the tele-communications space and is hoping that its offering will be more successful than MTN’s attempts at banking.

FNB is not the first bank to offer customers telecom services, but FNB chief executive Michael Jordaan believes FNB Connect will be more successful than Absa’s free internet service, which it ultimately had to sell to Vox telecoms to salvage. Jordaan says the model has been priced to provide savings while ensuring long-term sustainability. Although only offered as a value-added service for customers, Jordaan did not rule out rolling the product out to a broader client base.

In essence, by downloading FNB Connect software, you can make calls from your computer, cellphone and landline at reduced fees. But the cherry on top is the ability to make free phone calls, even overseas.

Making calls
For R249 per year and a one-off pre-paid top-up of R49, you can sign up with ConnectXtra. The pricing on actual calls is not aggressive when comparing landline calls or mobile to mobile contract prices, it carries no monthly fee and you are not locked into a contract. Overseas calls are a lot cheaper than Telkom. When compared to other pre-paid options, it is pretty aggressive with peak time mobile calls at R1.59 per minute compared to pre-paid mobile operators charging closer to R3 per minute.
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But the real cost saver is the free calls to other FNB numbers. As an FNB customer you can also purchase, for R50 each, four additional phone numbers and give them to any friends or family living locally or abroad. Any calls you make to them, anywhere in the world, via the FNB network, are free. You can also purchase airtime for other telephone numbers so parents can buy airtime for their children. Small businesses will find this a key benefit as well, with off-site workers able to keep in contact via their cellphones at no charge.

Using the internet
FNB is also providing a cheaper data service, however the offering is still limited as so far FNB has only signed up with ADSL. It is in negotiations with other service providers and hopes to expand this soon.


If a customer already has a Telkom landline, it will cost a one-off installation fee of R543.91 to get the ASDL line installed and a monthly rental of between R152 to R413 depending on the speed of the line. If a customer does not have a Telkom landline, it will cost a one-off installation fee of R969.41 and a monthly line rental of R276.20 for the slowest line and R573.20 for the fastest. Telkom says the average waiting period to install an ASDL line is 15.5 working days.

You then purchase data through FNB Connect i-fuel. Data is well priced. For example R100 will buy you 1.45 gigabytes(GB) of data. This is what you would pay for a bundled 1GB on an ADSL package. You can buy bandwidth for as little at R20 and you can carry over the data for 12 months if unused.

FNB charges 6.9c per megabyte which is the cheapest on the market with one pre-paid competitor charging 7c. If you already have an ADSL contract with a package and find you go over your limit each month it should work out cheaper to buy the additional data through FNB as its price per MB is 2c cheaper than the nearest competitor and 4c cheaper than the average competitor for additional data outside the bundle.

As with the call option you can purchase additional email addresses with 7GB email inboxes so the whole family or office can use the single account.

Technology
You need to have a cellphone that can access the internet but otherwise it is a pretty simple download. It took less than a minute to download the software on to the computer and you can then have the link sent by SMS to your cellphone for download.

You receive a new phone number starting with 087. You still retain your normal cellphone number but when making calls you use the FNB network so the person you phone will see the new number displayed. If they call you back you can pick up the call either through the computer, cellphone or landline (as long as it is linked to a router).

As it is a pre-paid system, you need to buy airtime, but the billing is real time so you can see how much you have spent on a call or you can even set a budget upfront and work out how much it will cost you before you make the call or purchase the data.

Bottom line effect
Pros
The free calls to FNB numbers make this an attractive offering for families or small businesses.

A company that I know of, which banks with FNB, are signing up as they see a significant cost benefit.

As a pre-paid option with real-time call history and billing information, you are able to manage your telecoms budget effectively either as an individual or company.

Cons
You need to have an FNB account. This applies to any account so it could be a savings account or their R59 a month transmission account. Even if you do not use this as your primary banking account the cost is more than offset on the savings. The data service is currently limited to ADSL, but that is to be expanded to other providers. This is already quite a competitive space in the pre-paid market and the savings are not as significant.

You cannot receive incoming calls on the FNB number from Vodacom or CellC.

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