MTN sees stronger South African growth as airtime advance reliance falls

MTN South Africa is banking on a major reset of its prepaid business to drive stronger growth in the second half of 2026, even as stretched household budgets and intense competition continue to weigh on consumer spending.

The operator is intentionally sacrificing some short-term revenue growth to improve the quality of its prepaid customer base and reduce reliance on airtime credit.

The strategy comes as MTN South Africa delivered a mixed performance in the six months to June. Service revenue increased 1.5% to R21.9bn, supported by solid growth in postpaid, enterprise and wholesale, while total revenue declined 1.6% to R25.2bn. Its customer base slipped 0.7% to 39.5-million as the company pared back parts of its prepaid segment.

MTN Group CEO Ralph Mupita described the South African business as “a tale of two stories”, with strong momentum in postpaid, enterprise and wholesale offsetting weakness in prepaid.

Enterprise revenue rose 5.8%, wholesale revenue jumped 13.7%, and postpaid service revenue increased 4.9% as the postpaid subscriber base expanded 9.1% to 4.8-million.

Prepaid service revenue declined 3.3% as MTN deliberately reduced reliance on airtime credit. The prepaid customer base fell to 28.2-million in the second quarter, down 4.5% year-on-year.

Mupita said MTN has been deliberately restructuring its prepaid customer base to reduce dependence on airtime advance products.

“We want a base that’s less dependent on airtime credit,” he said.

The group was prepared to sacrifice some short-term revenue to improve the quality of its customer base.

MTN has reduced the proportion of prepaid customers using airtime advance from about 42% to the low 30s. More importantly, repayment within the same month has improved from about 50% in October last year to 70%, reducing outstanding balances.

There are also signs that customers are increasingly able to fund their own airtime recharges. While overall cash recharges were broadly flat, cash recharges excluding airtime advance repayments increased 9.4% year-on-year.

MTN is also expanding direct recharge channels through partnerships with major banks, allowing customers to buy airtime directly through their banking platforms.

“We’ve onboarded quite a few of the large banks where bank recharge is becoming a bigger channel,” he said.

The strategy is aimed at reducing dependence on airtime credit while making it easier for customers to recharge directly through their banking platforms.

Mupita said MTN was encouraged that South Africa’s overall performance strengthened during the second quarter, with growth improving from 0.7% in the first quarter to 2.3%.

The outlook, however, remains cautious. MTN expects consumer spending pressure and intense competition to persist through the remainder of 2026 but believes its prepaid reset, stronger data demand, postpaid growth and enterprise performance can support a recovery.

The group has budgeted R7.7bn in capital infrastructure in South Africa for the full year.