South Africa has four banking MVNOs (Capitec Connect, FNB Connect, Standard Bank Connect and Nedbank Connect), and they’re all essentially running the exact same playbook.
The logic is simple enough: use a mobile product to deepen the banking relationship, gather behavioural data between transactions and create sticky switching costs as a customer’s financial life grows.
From the customer’s perspective, the pitch is always identical: port your Sim to us, earn rewards on your mobile spend and keep everything under one roof. While the execution might vary, the underlying engine does not.
The catch? This market is effectively tapped out. Adult Sim penetration in South Africa sits at a staggering 266%. According to Africa Analysis’s 2025 outlook, out of the 38 MVNO brands that have launched here, only 21 are still breathing. Right now, the failure rate outpaces the rate at which new entrants can actually find a foothold. Every new subscriber an MVNO claims is poached from an existing base, not from an untapped pool of the unconnected. The pie isn’t getting any bigger; we’re just trading slices.
Enter Absa.
For eight months, the fifth major bank has been “publicly assessing” the MVNO space – and probably far longer than that. Yet, as of June 2026, we still don’t have a launch date, a named network partner or even confirmation that the project is alive. Instead of a concrete proposition, we’re just getting corporate holding statements.
Untouched potential
What makes this radio silence so loud is the massive, untouched potential sitting right in front of the bank. Absa holds roughly 10 million retail account relationships. Granted, many South Africans bank with multiple institutions, so the number of unique individuals is lower. But the core fact remains: not a single one of those customers is on an Absa mobile network. While competitors like Capitec (sitting at 1.5 million active users as of early 2026), FNB, Standard Bank and Nedbank are busy churning through their own captive audiences, Absa’s entire base is wide open.
The opportunity is very much alive. The real question is whether the institution knows what to do with it.
Read: The trap inside South Africa’s banking MVNO boom
There’s likely a structural reason for the delay that goes beyond mere corporate red tape. Running the exact same play as four entrenched competitors in a saturated market is a recipe for failure. If Absa launches with the standard “rewards on mobile spend” model, they might see a flicker of interest from their most loyal customers, but the broader argument to switch will fall flat.
Why would an Absa client currently cruising on a Vodacom or MTN post-paid contract go through the hassle of porting their number just for a slightly different flavour of the same deal? Volume is the one currency this market is out of, and being fifth in line with the identical pitch is a volume game you simply cannot win.
The untapped mechanism
To survive as a late entrant in a closing market, you need a trump card: a mechanism the established players haven’t used, rather than just a polished version of what they already have. And the crazy part? This mechanism exists, yet no bank anywhere – not even aggressive mobile innovators like Revolut in the UK or Nubank in Brazil – has deployed it. The window, to my mind, is wide open.
It’s not even technically complex. Look at the current model: it runs in a straight line where a mobile action triggers a banking reward (buy data, earn points). The late-entrant advantage is the ability to run that engine in reverse.
Read: MVNOs take centre stage in legislative shake-up
Instead of rewarding mobile behaviour, your existing banking relationship dictates your mobile benefits upfront.
Think of it like this: your data allocation isn’t a prize for buying a bundle; it’s a direct perk of how deep your banking relationship is. The customer doesn’t buy a bundle and receive a reward. The relationship is the bundle.
This completely flips the script on customer retention. Existing MVNOs give you reasons to stay after you join (like losing cashback if you leave). This relationship-depth model gives you a compelling reason to jump ship in the first place: your current Absa accounts essentially fund the mobile data you’re currently paying MTN or Vodacom for. But if you move your home loan to another bank? You lose your data allocation. That is a vastly more powerful retention hook than simply losing a few cents of cashback.
The advantage of a blank canvas
What’s stopping the others? It’s organisational inertia, not tech limitations. The established players are locked into loyalty architectures built around cashback. Unpicking those deeply integrated product stacks is an expensive nightmare. A late entrant, however, has a blank canvas. They can design around this relationship-centric mechanism from day one.
But that blank canvas comes with strict design constraints:
- Quality is the baseline: You can’t pick a network partner based purely on wholesale cost. If you’re targeting premium MTN or Vodacom post-paid users, routing them through a sub-par network will feel like a downgrade, instantly killing the value proposition.
- Frictionless activation: If the value is delivered through the banking relationship, activation must happen entirely within the banking app the moment a customer qualifies. No branch visits. No couriers.
- eSim as the default: Physical Sims don’t fit this model. While FNB Connect introduced eSim support back in November 2024, making it the primary, designed channel – with seamless customer education built into the onboarding flow – is an opportunity still waiting to be claimed.
The clock is ticking
This window won’t stay open forever. At least one of the established competitors already has a loyalty architecture that could relatively easily pivot to this model. Every month Absa delays is a month its rivals have to close the gap. Inertia is the only thing holding this window open, and inertia inevitably cracks.
Naturally, this proposition shines brightest for customers who use Absa as their primary bank – the ones who gain enough value to actually justify leaving their current mobile provider. With multi-banking being so widespread, a meaningful share of those 10 million accounts won’t clear that hurdle.
Read: Vodacom CEO on MVNOs: too many cooks will spoil the mobile broth
Eight months of silence. Ten million untouched account relationships. A game-changing mechanism sitting globally unused. When Absa finally breaks its silence, the real story won’t be in the press announcement. It will be in the architecture of what they actually decided to build.
- The author, Pambos Soteriades, is a telecoms and strategy consultant with 28 years’ experience in African mobile markets, including executive roles at Vodacom Group and Telkom Kenya. He has worked in the South African MVNO market on both the operator and MVNO side. He is not affiliated with, employed by or invested in any institution, operator or MVNO mentioned in this article
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