MTN South Africa has lost roughly 1.5 million consumer prepaid customers since the start of the year, shrinking its total subscriber base, as it presses ahead with a deliberate cull of users who depend on borrowed airtime.

The prepaid base fell from 29.7 million at the end of December to 29.3 million at end-March and 28.2 million at end-June, a 4.5% decline year on year. The losses pulled MTN South Africa’s total base down 0.7% to 39.5 million. As recently as the first quarter, that base was growing at 3%.

MTN attributed the fall to “negative net additions in the prepaid market as the focus shifts to improving the quality of the base”.

Voice revenue fell 10.2% in the six months to end-June, a steeper rate than the 9.6% recorded in the first quarter, which means the second-quarter decline was worse again. It is the fourth consecutive quarter of falling voice revenue in MTN’s home market, and the rate has increased every quarter.

Service revenue grew 1.5% to R21.9-billion, below the low-to-mid single-digit range the group nevertheless reaffirmed as its medium-term target for the unit. Total revenue fell 1.6% to R24.8-billion, with device sales down about a fifth to R2.9-billion on the segment numbers.

Earnings before interest, tax, depreciation and amortisation (Ebitda) fell 7.6% to R8.5-billion and the margin contracted 2.3 percentage points to 34.2%, below the 35-37% band MTN also reaffirmed. Excluding the effect of the MTN Group share price on the provision for the South African employee share scheme, Ebitda fell 3.8% and the margin was 37.1%, down 0.8 percentage points.

Healthier business

South Africa now generates 19% of group service revenue but only 15.2% of group Ebitda.

MTN’s case is that the subscriber losses buy a healthier business. It has been cutting back XtraTime, which lends prepaid customers airtime and data, and steering them towards cash recharges.

On its own numbers, that is producing results. In-month repayment rates on airtime 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 airtime advance repayments they grew 9.4%. Prepaid data revenue rose 4.4%, accelerating to 5% in the second quarter from 3.8% in the first, and prepaid data consumption climbed 23.6% to 4.9GB/subscriber.

Read: MTN South Africa struggles as competition bites in prepaid market

Prepaid service revenue fell 3.3%, the same rate as the first quarter and an improvement on the 3.8% decline of the fourth quarter of 2025.

The cost shows up elsewhere. Fintech revenue, which includes XtraTime, dropped 16.3% to R701-million. Digital services revenue fell 7.5% on weaker prepaid recharge activity.

The voice decline is harder to fix than the prepaid one because it is not primarily a pricing problem. Capitec Connect, which runs on Cell C’s wholesale network, scrapped charges for calls between its own Sim cards in April and carried 768 million voice minutes in the year to February, up 150%. It is selling a banking relationship rather than minutes, and there is no tariff below free.

MTN attributed its own voice decline to customers migrating out of out-of-bundle usage towards bundled offers and pure data, and to the adoption of VoIP and digital messaging. The shift was evident in both the prepaid and post-paid segments, it said.

The rest of the business held up. Consumer post-paid service revenue rose 4.9% and the post-paid base grew 9.1% to 4.8 million, helped by the price increase implemented in February. Enterprise revenue grew 5.8% and wholesale 13.7%, a marked improvement on the 6.9% of the first quarter.

Wholesale growth came from national and international roaming and from fixed and mobile data, partly offset by lower Telkom national roaming revenue on reduced traffic volumes and by the 2c cut in the mobile termination rate that took effect in July 2025.

Data revenue grew 4% to R10.9-billion, with network traffic up 27.7% and average post-paid usage up 32% to 32.3GB/month.

MTN blamed higher fuel costs, elevated interest rates following the Reserve Bank’s repo rate increase to 7% in May and “localised civil disruption” for constraining prepaid customers’ spending power.

Read: Capitec blows up MVNO pricing with free on-net calls

The South African performance again stands apart from the group, which lifted service revenue 17.5% in constant currency to R115.3-billion and expanded its Ebitda margin 3.1 percentage points to 47.6%. — © 2026 NewsCentral Media