MTN South Africa has cut the proportion of prepaid recharges funded by airtime credit from 42% a year ago to about 34%, a deliberate reset that it says cost it 1.1 million prepaid customers in the second quarter alone and knocked 16.3% off its fintech revenue.

Group CEO Ralph Mupita told a media call on Monday that the reduction was intentional. “We want a base that’s less dependent on airtime credit,” he said, describing a process of weaning heavy users off the product.

The cost is visible across MTN’s interim results. Fintech revenue, which includes XtraTime, fell 16.3% to R701-million, a decline MTN attributes primarily to the reset.

XtraTime advances dropped 18.3% in the first quarter. Prepaid service revenue fell 3.3%, and the prepaid base fell from 29.3 million at the end of March to 28.2 million at the end of June, taking the loss over the six months to roughly 1.5 million once competitive pressure and consumer strain are included.

MTN’s argument is that what remains is worth more. In-month repayment rates on advances have improved from about 50% in October 2025 to 70% now, leaving materially lower outstanding balances. Cash recharges were broadly flat overall, but excluding advance repayments they grew 9.4%. Mupita said MTN had also onboarded several large banks so that direct bank recharges become a bigger channel.

MTN built the exposure it is now unwinding. In its quarterly update for September 2023, it reported XtraTime penetration of 26.2%, up from 25.3% a year earlier, and credited the product with supporting voice revenue as prepaid calling declined. The same document set out plans to drive penetration higher still.

Telkom is growing prepaid on the back of it

In its trading update for the quarter to June, Telkom disclosed that airtime advance made up 24.7% of prepaid recharges across 4.4 million active users. Over the same quarter its prepaid service revenue rose 9.1% to R3.97-billion, the single biggest driver of its mobile growth.

More than half of that prepaid revenue – 54.6% – came through Mo’Nice and Mo’Town, the customer value management platforms Telkom describes as people-led AI, as TechCentral reported earlier this month.

Telkom’s prepaid base is not uniformly growing either. It ended June at 22.3 million, up 7.1% year on year but down roughly 326 000 on the prior quarter, with the total mobile base off about 372 000 over the same three months. What separates it from MTN is that it has signalled no intention of reducing its credit exposure.

Vodacom is sitting at around half

Vodacom, South Africa’s largest mobile operator, sits highest of the three. In its integrated report published in June, it disclosed that Airtime Advance represented around half of total prepaid recharges in South Africa during the year to March.

“Airtime Advance remains an important facilitator of customer convenience,” Vodacom said.

Its prepaid business is not growing on the back of it. Prepaid mobile customer revenue fell 2.1% to R26.7-billion, with the decline moderating to 1.6% in the fourth quarter. The prepaid base rose 0.4% to 39.1 million and prepaid Arpu (average revenue per user) reached R58, up 7.4%, which Vodacom attributed to a healthier but smaller average subscriber base.

All three now disclose the share of prepaid recharges funded by advance, and they sit far apart. Vodacom is highest at around half. MTN is at about 34%, down from 42% a year earlier. Telkom is lowest at 24.7%, across 4.4 million active users. MTN is the only one of the three that has disclosed a decline.

None of the three publishes a default or write-off rate in its results reporting. MTN is alone in disclosing repayment performance at all, and only since it began reducing the book.

A regulatory has already switched it off once

Airtime lending has been treated as a consumer-credit problem in MTN’s largest market. Nigeria’s Federal Competition and Consumer Protection Commission forced MTN to suspend airtime advance from mid-April to early July, cutting the eligible customer base by about a quarter and costing MTN Nigeria three percentage points of service revenue growth for the half. Excluding the suspension, Nigerian service revenue grew 28.7% rather than 25.7%.

MTN relaunched in July through four newly onboarded providers, with what Mupita called a more conservative lending policy. Group fintech revenue growth is expected to stay below MTN’s medium-term guidance range while the eligible base rebuilds.

MTN has faced no equivalent intervention in South Africa, where Vodacom charges an access fee of R1.20 including VAT for every R10 or part thereof advanced, repayable on the customer’s next recharge. On a R10 advance that is 12%, over a period that can be as short as a few days.

Whatever the three decide about credit, the prepaid customer is being courted by companies that earn nothing from lending airtime. Capitec Connect, which runs on Cell C’s wholesale network, scrapped charges for on-net calls in April and carried 768 million voice minutes in the year to February, up 150%. It is selling a banking relationship rather than minutes.

MTN’s bet is that a prepaid base repaying what it borrows is worth more than a larger one that does not. Whether the customers it shed turn up on a rival’s network will be visible in the next two quarters. – © 2026 NewsCentral Media