SOUTH AFRICA – Supermarket chain store Pick n Pay will start providing mobile phone services to try to grow its value-added and financial services business, seeking to drive down data costs for its customers.

Rather than building infrastructure, Pick n Pay will operate as a mobile virtual network operator (MVNO), using MTN’s mobile network infrastructure to offer customers prepaid, SIM-based access to services including airtime, data, and SMS, sold under its PnP Mobile brand, the company has said.

MVNOs, which typically target the value segment, lease wireless capacity at wholesale prices and resell it at reduced retail prices.

“Our country has a remarkably high mobile phone penetration, but data costs have been a barrier. We believe expanding our services to enter the mobile market will benefit millions of our customers,” said Richard van Rensburg, chief technology and services officer at Pick n Pay.

“Our pricing will be simple, transparent and competitive with other providers plus we’ll be offering substantial free data rewards just by shopping in our stores”

Africa’s most industrialised economy has one of the highest data prices on the continent, according to South Africa’s Competition Commissioner Tembinkosi Bonakele.

Data costs have come down after mobile operators were forced to cut prices last year.

PnP Mobile, which joins retail peer Mr Price in the MVNO space, will be linked to the retailer’s Smart Shopper loyalty rewards programme.

“Customers harnessing MVNO services, such as PnP Mobile, benefit from broader and more affordable service offerings and can manage their activity in one place – essentially integrating their virtual lives,” said Quintus De Beer, executive for Managed Network Services at MTN SA.

PnP Mobile will join Pick n Pay’s growing list of value-added and financial service offerings, including the ability to do their banking at till points.

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