MTN Group is confronting a shift in consumer behavior that is beginning to weigh on one of its most important segments—prepaid services in South Africa.
In its 2025 integrated report, the telecom giant flagged two growing pressures: a surge in gambling activity and intensifying competition from mobile virtual network operators (MVNOs). Together, these forces are reshaping how consumers allocate their spending, and challenging MTN’s traditional revenue model.
The impact is already visible in the numbers. MTN South Africa reported service revenue growth of just 2% for the year ended December 31, a stark contrast to the group’s overall growth of 22.7% in constant currency. By comparison, MTN Nigeria and MTN Ghana delivered significantly stronger performances, growing at 54.9% and 35.9% respectively.
This divergence underscores a deeper issue: South Africa, once a cornerstone of MTN’s profitability, is becoming a more challenging market.
Consumer Spending Is Shifting
At the heart of MTN’s concern is the rapid rise in gambling. Industry data shows that South Africa’s betting sector generated nearly R75 billion in gross revenue during the 2024/2025 financial year, with total spending estimated at $58.7 billion—up 40% year-on-year.
For telecom operators, this trend matters. Prepaid customers, who make up a significant portion of MTN’s user base, typically operate within tight budgets. As more disposable income flows into betting, less is available for airtime and data purchases.
The result is a subtle but meaningful shift: connectivity is no longer the default priority for every consumer.
MVNOs Are Changing the Competitive Landscape
At the same time, MVNOs are quietly gaining ground.
By leveraging existing network infrastructure and competing aggressively on pricing, these operators are attracting cost-sensitive users with more flexible and localized offers. Their ability to tailor bundles and undercut traditional pricing models is putting additional pressure on incumbents like MTN.
This dual squeeze, reduced consumer spending and rising competition, is reflected across key metrics. Fintech revenue in South Africa declined by 8.4% in 2025, while digital and voice revenues also contracted. Only data revenue showed modest growth at 4.5%, alongside a stronger 13.6% increase in enterprise services.
Overall, EBITDA fell by 10.2%, with margins narrowing to 34.5%.
A Strategic Reset
In response, MTN is recalibrating its approach.
The company has identified restoring profitable prepaid growth in South Africa as a top priority for 2026. Its strategy centers on more granular pricing, personalized bundles, and improved distribution channels all aimed at better aligning with evolving consumer needs.
Beyond prepaid, MTN is also betting on home connectivity as a growth driver, expanding its fixed-wireless access and fibre-to-the-home offerings to capture demand in a different segment of the market.
What This Means for the Industry
MTN’s experience highlights a broader shift in the telecom sector: competition is no longer just about network quality or coverage, it is increasingly about share of wallet.
As digital alternatives from gambling to streaming and fintech, compete for the same limited consumer income, telecom operators must rethink how they deliver value.
For MTN, the challenge is clear. Growth in mature markets like South Africa will depend less on expanding access and more on winning back relevance in how consumers choose to spend.
The question now is whether pricing innovation and service diversification will be enough to reverse the trend, or whether deeper structural changes in consumer behavior are here to stay.
