MTN South Africa’s data surge fails to lift revenue

By Amara Osei

MTN South Africa’s data revenue rose 6% in the third quarter of 2026, while service revenue was flat, according to its latest trading update.

Data revenue increased 4.7% in the first nine months, against just 1% year-on-year growth in service revenue. MTN South Africa is the country’s second-largest mobile operator.

Network traffic increased 27.9% during the first nine months, according to the update. MTN Group chief executive officer Ralph Mupita acknowledged that the business remained short of its growth ambitions.

“While MTN SA’s service revenue was flat in Q3 2026 and up 1.0% YoY, it remains below our medium-term target,” he said in the statement. “We were however encouraged by the month-on-month improvement in prepaid trends.”

What is driving the gap between traffic and revenue?

MTN South Africa’s trading update showed average monthly data use among postpaid customers rising 31.9% to 32.8GB during the first nine months. Prepaid data consumption increased 28.9% to 5.2GB a month. Smartphone penetration in South Africa stood at 70.6%, according to the update.

MTN said operators need customers to buy data bundles at prices that fund investment and deliver value. The company said new forms of connectivity increasingly compete with traditional mobile services, while customers face affordability pressures. Broad mobile internet adoption, it said, does not automatically produce stronger returns.

Why is prepaid revenue falling?

MTN South Africa’s trading update showed prepaid revenue declining 3% in the first nine months and 2.4% in the third quarter. The quarterly contraction improved from 3.2% in the previous quarter, but the segment remained under pressure. The update showed the prepaid customer base falling 6.9% to 27.4 million and total South African customers declining 2.7% to 39 million.

MTN said it was deliberately focusing on a healthier, more valuable prepaid customer base. The company also pointed to pressure in the consumer voice market and lower mobile termination rates.

Where is MTN monetising data faster?

MTN’s trading update showed Nigerian data revenue growing 31.4% in the third quarter and Ghanaian data revenue rising 39.9%. South Africa’s 6% increase was comparatively modest. MTN’s figures suggest that differing market dynamics shape the group’s ability to monetise data demand.

In Uganda, MTN said data revenue growth slowed to 7.8% in the third quarter from 17.5% in the previous quarter. The company partly attributed the slowdown to unauthorised public Wi-Fi resellers drawing usage away from mobile data. MTN did not quantify the revenue diverted and did not indicate that the same pattern was occurring in South Africa.

MTN’s disclosure nevertheless highlights a wider competitive threat. Alternative connectivity channels increasingly compete with mobile networks for control of internet access and the revenue it generates.

Can margin gains support a revenue recovery?

MTN South Africa is focusing on restoring service revenue growth to the low-to-mid single digits over the medium term. It is also working to expand home connectivity through fixed wireless access and fibre. The stated plan combines improved prepaid trends with cost reductions intended to restore growth.

The trading update reported third-quarter earnings before interest, taxes, depreciation and amortisation rising 7%. Its margin expanded by 3.6 percentage points to 38.1%, according to the update, reflecting early benefits from cost interventions. Service revenue remained flat in the quarter, while the customer base continued to contract.

According to the trading update, data accounted for 50.4% of MTN Group’s service revenue in the first nine months of 2026. Yet MTN South Africa’s stronger traffic and usage growth has not produced comparable revenue growth, leaving the market harder to monetise.

The next test is whether MTN South Africa can translate rising prepaid usage, cost interventions and a 38.1% EBITDA margin into low-to-mid single-digit service revenue growth. The operator’s 27.9% traffic increase currently signals demand more clearly than it signals revenue.