12 March 2010
	TELECOMS FNB's hotspot By Larry Claasen

Banking group FNB has found some traction in its efforts to become a telecommunications company. Since its launch last year the group has signed up more than 5 000 users. Besides credit cards and bank loans, its clients can now also get cut-rate voice and data telecom products. The move into telecom s is not that unusual for the group, says FNB Connect director Farren Roper. Farren Roper - Adding value to banking The bank had in place substantial telecoms and IT infrastructure which the new service is piggybacking on without greatly pushing up costs. "We're still into banking first. This is an extra value-add," he says. World Wide Worx MD Arthur Goldstuck says banks share similar characteristics with telecom companies, as they need a secure network that can simultaneously deal with thousands of transactions. Telecom companies have been trying to get into banking for some time, so it's understandable that banks are trying to get into telecoms, he says. FNB's former telecom subsidiary, FirstNet, which processed deals worth R70bn/year, became Gateway Communications when it was sold in 2002, and is now part of Vodacom. FNB is offering new products like pay-as-you-go fixed-line Internet connection, international calls from 25c/minute and calls to mobile phones for 99c/minute. It is also partnering Internet Solutions to offer free voice services via WiFi hotspots around the country. The door to offering the new service was opened in 2008 when Altech won a case against the department of communications, giving companies the right to deploy their own networks. Previously, they were legally obliged to depend on incumbent operators such as Telkom to provide such a service. Goldstuck says FNB's new service says more about the telecom sector than about the bank. "The story is not about banks getting to telecom s but about telecom companies not passing price cuts down to consumers," he says. One danger in running a telecom service is that it may become so popular that the bank is not able to handle the demand. Absa ran into this difficulty in the 1990s, when it offered a free Internet service. But Roper is confident FNB has the capacity. "We are in it for the long haul," he says.