Telkom pushes new products in financial services
Telkom is increasing its financial services offerings with products such as insurance, following the trend of mobile network operators.
As mobile operators in Africa increase their investments in fintech services, mainly focusing on mobile payments, the fixedline operator has decided to go in a different direction as a way to earn new revenue streams to offset the continued decline in Telkom’s legacy copper-line business.
Having started the process to rebrand and repurpose the almost 70-year-old Yellow Pages into an online marketplace called Yep! in 2020, the company is now adding services such as insurance and online payments, capitalising on its 500,000 users to grow quickly. Yep! Online Marketplace allows businesses that have listed their services, offerings and contact details to sell directly to the public, allowing for buying, selling and bidding between businesses and to consumers.
“Yep! is a strategic hub for fintech products and solutions to service our small-business clients that were traditionally using the Yellow Pages,” Telkom Business’s chief commercial officer, Dumisani Bengu, told Business Day last week. “We’ve recently launched a new insurance product on the platform, as well as online payments processing,” he said.
Telkom Business is the unit inside the partially state-owned operator tasked with dealing directly with small businesses.
Bengu explains that Telkom’s small-business clients had been taken care of by its information technology division, BCX, for the past few years. After a review, the group’s management decided that BCX worked best servicing large corporate clients.
As a result, Telkom Business has taken on about 26,000 clients from BCX, leaving the information technology unit with about 4,000. This is before considering the 500,000 businesses registered on the old Yellow Pages.
Without revealing actual numbers as to the take-up of its new online marketplace, Bengu said there’s been an “enthusiastic” take-up of Yep!.
While the initial phase of the rollout focused on setting up an online or e-commerce presence for Yellow Pages users, a large part of the strategy is to grow revenues beyond the traditional subscription base.
Bengu said Telkom has, in the past, offered insurance to consumers in the form of life and device offerings. The group is looking to extend its insurance offerings to small businesses. In addition to the loans, the fixedline operator is now giving small-business loans to clients.
Working with partners that include banking group Absa, Bengu says they can extend up to R1m to a small business but these amounts tend to range between R100,000 and R200,000. Telkom also has mobile wallets and can facilitate online payments for businesses that use their platform to engage with customers.
With e-commerce rising in SA, it makes sense for marketplaces to be gaining in popularity. Telkom’s approach follows the trend of mobile operators in SA and the rest of the continent looking to leverage their large customer bases as a way to grow new revenue streams at scale, capitalising on the growth of e-commerce.
SA’s largest mobile network operator, Vodacom, has had a financial services strategy driven by fintech business MPesa outside SA, focusing on mobile payments and lending.
In SA, the failure of Vodacom’s mobile money efforts saw the unit shift to offering insurance, payments, lending and trade finance. It recently teamed up with Jack Ma’s Alipay to launch an e-commerce platform similar to China’s WeChat, which will house its financial services offerings, entertainment and content products.
MTN, the largest mobile provider on the continent, has been working to promote its mobile payments platform, which recently exceeded 40-million users across its territories.