Telkom has done something Vodacom and MTN could not
Telkom has managed to grow its mobile prepaid subscriber base, even as South Africa’s two largest operators, Vodacom and MTN, both reported declines.
In its results for the six months ended 30 September 2025, Telkom reported that its total mobile subscribers grew by 7.7% to 24.5 million.
This increase was fuelled by continuing growth in its prepaid subscriber base, which rose by 9% to 21.6 million. Prepaid average revenue per user (ARPU) held at R60, while its blended ARPU was R77.
Meanwhile, Vodacom reported in its interim results for the same period that its prepaid mobile customer revenue decreased 1.6% to R13.2 billion.
“The result was impacted by pressure on the consumer wallet and incremental competitive intensity,” Vodacom stated.
“In the second quarter, prepaid revenue declined 2.9% (1Q: 0.4%). Our prepaid base of 39.2 million customers declined 7.4% as we churned inactive customers in prior quarters.”
In the second quarter, Vodacom added 0.3 million customers, and it said the resultant customer base delivered a healthier second-quarter ARPU of R57, up 3.6%.
MTN has a different financial year than Telkom and Vodacom, but it provided a trading update for its third quarter.
MTN reported that its prepaid customer base decreased by 0.4% to 29.4 million from 29.5 million, also citing higher churn amid intensified competition in the segment.
While MTN’s prepaid subscriber base is still larger than it was in the first and second quarters of 2024, it is smaller than in the third and fourth quarters of last year.
MTN had 29.5 million prepaid subscribers in South Africa in September 2024. That means the figures remain the same whether you analyse its prepaid base quarter-on-quarter or year-over-year.
| Mobile operator | Prepaid subscribers on 30 September | % Change |
|---|---|---|
| Telkom | 21.6 million | +9.0% |
| MTN SA | 29.4 million | -0.4% |
| Vodacom SA | 39.2 million | -7.4% |
Telkom’s AI-driven prepaid strategy
Asked about this disparity between Telkom and the rest of the sector’s prepaid figures, the CEO of Telkom’s consumer and small business division, Lunga Siyo, said they actively focused on the segment.
“There has been a change in behaviour from a customer perspective. People’s disposable incomes are hard-pressed, so customers like to control their spend, and they find resonance with prepaid,” said Siyo.
“On the other hand, you would have noticed that, for every operator, data traffic has been increasing.” In other words, they all have had to deliver more while charging less.
To optimise its products and packages, Siyo said Telkom doubled down on its data science and customer value management capabilities to better understand customer behaviour.
“As we acquire customers, we then get a couple of data points in terms of how you behave, your frequency of recharging, your frequency of top-ups, your location, your movements, what works for you,” he explained.
“Is it a pocket router? Is it an LTE router? Is it a mobile SIM card? These are all data points we consider.”
Siyo said they also disagreed with many analysts who said the telecommunications sector was ex-growth. There was growth to be had as long as you were focused and offered good value.
“If you look at the entire industry, total growth is around 2–3%. However, if you play within that, you can find your own space and find growth,” he said.
“Others might struggle, and you still have depressed levels of disposable income, so you really have to play a value game in the market.”
Another factor was keeping your costs down to ensure you drive positive margins. “Otherwise, everyone suffers,” said Siyo.
South Africans cutting cellular spending
Mobile network operators have repeatedly used phrases such as “despite challenging economic conditions” in their financial reports to describe their performance in South Africa over the past few years.
Results from the latest Old Mutual Savings and Investment Monitor agree. It showed that spending on cellular services is among the first things households cut back when they come under financial pressure.
While there has been some improvement since last year, 23% of respondents said they have adapted their lifestyles by switching to the cheapest cell phone or data plan.
This is down from 27% last year, following the trend of consumers overall taking a more relaxed stance to cost-cutting. However, it remains high with over 1 in 5 people saying they cut cellular spending.
Interestingly, the impact of people’s cost-cutting is not immediately evident in the revenue and service revenue figures of Vodacom, MTN, and Telkom.
Each operator has found its own way to maintain and grow revenues despite the high-interest-rate, high-inflation environment South Africa has navigated in recent years.
However, one indicator which clearly illustrated that end-users had cut back on their cellular spending was the declining average revenue per user across all operators.
An analysis of their annual financial results since 2020 shows that MTN SA’s ARPU has declined substantially in the past six years, while Telkom has seen year-over-year declines since 2021.
Meanwhile, Vodacom SA’s blended ARPU is higher than it was in 2020, but lower than its high in the 2021 financial year.
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