MTN South Africa has deliberately reduced the share of prepaid subscribers using credit on time from 42% to around 30%. This adjustment resulted in the loss of 1.1 million prepaid customers in the second quarter alone and a 16.3% decrease in fintech service revenue.
Group CEO Ralph Mupita stated during a press conference on Monday that this reduction was planned. He explained that the company's goal is to build a base that is less dependent on credit on time, describing the process of heavy users gradually abandoning this product.
The consequences of this strategy are reflected in MTN's interim reports. Revenue from fintech services, which includes XtraTime, fell by 16.3% to 701 million rand, which MTN attributes mainly to this adjustment. Furthermore, advance receipts for XtraTime decreased by 18.3% in the first quarter, and prepaid service revenue dropped by 3.3%.
The prepaid customer base shrank from 29.3 million at the end of March to 28.2 million at the end of June, leading to losses of approximately 1.5 million over six months, considering competitive pressure and consumer burden. However, MTN argues that the remaining base is more valuable. Advance repayment rates within a month improved from about 50% in October 2025 to 70% currently, resulting in a significantly smaller volume of outstanding amounts. Although total cash top-ups remained roughly the same, excluding advance repayments, they grew by 9.4%. Mupita also reported that MTN has connected several major banks to make direct bank top-ups a more significant channel.
None of MTN's two main competitors have signaled such a departure from the practice.
Telkom
In its quarterly trading update for the period ending in June, Telkom revealed that on-time advances accounted for 24.7% of prepaid top-ups among 4.4 million active users. During the same period, the company's prepaid service revenue increased by 9.1%, reaching 3.97 billion rand, which was the largest driver of mobile business growth. More than half of this revenue, specifically 54.6%, came through the Mo’Nice and Mo’Town customer value management platforms, which Telkom describes as AI-managed, according to a TechCentral report earlier this month.
Telkom's prepaid customer base is also not growing uniformly. By the end of June, it stood at 22.3 million, which is 7.1% higher than the previous year, but approximately 326,000 fewer than the previous quarter, and the total mobile base decreased by about 372,000 over the same three months. A difference between Telkom and MTN is that the company does not intend to reduce its exposure to credit risks.
Vodacom
Vodacom, South Africa's largest mobile operator, holds a leading position among the three companies. In its integrated report published in June, the company reported that on-time advances constituted about half of the total prepaid top-ups in South Africa for the year ending in March. Vodacom stated that 'On-time advances remain an important tool for ensuring customer convenience.'
The growth of its prepaid business is not driven by this factor. Income from prepaid mobile customers decreased by 2.1% to 26.7 billion rand, with the decline slowing to 1.6% in the fourth quarter. The prepaid customer base grew by 0.4% to 39.1 million, and the average revenue per user (ARPU) in the prepaid segment reached 58 rand, which is 7.4% higher, which Vodacom attributed to a healthier, albeit smaller, average subscriber base.
Comparing these three operators is more complex than it should be. Vodacom and Telkom report the share of prepaid top-ups financed by advances—about half and 24.7% respectively. MTN reports the share of its prepaid customer base using this product and does not publish a top-up share metric. With Telkom's 4.4 million users compared to a base of 22.3 million, this equates to about 20% by MTN's metric. None of the three companies publishes data on default or write-off rates in their reports. Only MTN discloses repayment figures, and only after it began reducing the credit volume.
Nigeria
Issuing on-time credits was viewed as a consumer lending issue in MTN's largest market. The Nigerian Federal Competition and Consumer Protection Commission forced MTN to suspend on-time advance issuance from mid-April to early July, which reduced the relevant customer base by about a quarter and cost MTN three percentage points of service revenue growth over the half-year. If the suspension is excluded, service revenue in Nigeria grew by 28.7%, not 25.7%.
MTN resumed operations in July through four new providers, implementing what Mupita called a more conservative lending policy. Group fintech revenue growth is expected to remain below MTN's medium-term forecast range while the relevant base recovers.
MTN has not faced similar intervention in South Africa, where Vodacom charges a 1.20 rand VAT-inclusive access fee for every 10 rand or part thereof, which must be repaid upon the next customer top-up. At a 10 rand advance, this amounts to 12% for a period that may last only a few days.
Regardless of the decision these three companies make regarding lending, the prepaid customer is attracted by companies that do not earn income from issuing time. Capitec Connect, operating on the Cell C wholesale network, cancelled in-network call charges in April and processed 768 million voice minutes in the year ending February, which is 150% more. This company sells banking relationships, not minutes.
MTN's stance is that a smaller base of cash-paying prepaid customers is more valuable than a larger base operating on advances. It remains to be seen whether the customers lost by MTN will return to competitor networks in the next two quarters.