Mtn’s South African Data Boom Is Not Translating Into Revenue Growth

MTN South Africa’s customers are consuming more mobile data than ever, but the country’s second-largest mobile operator is finding it difficult to translate that demand into revenue growth.

Data revenue grew by 4.7% in the first nine months of 2026, improving to 6% in the third quarter, according to the group’s latest trading update. Yet service revenue rose by just 1% year-on-year (YoY) over the nine months and was flat in the quarter.

The disconnect highlights a broader challenge for African telecoms operators, as growing internet use does not necessarily translate into stronger financial returns. Operators must monetise data demand while customers face affordability pressures and new forms of connectivity compete with traditional mobile services.

MTN Group chief executive officer (CEO) Ralph Mupita acknowledged that the business remains 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.”

The figures reveal a gap between the data moving across MTN’s network and the revenue it generates from customers. Network traffic rose 27.9% during the nine months, while average monthly data use among postpaid customers rose 31.9% to 32.8GB. Prepaid data consumption also climbed 28.9% to 5.2GB a month.

Mobile internet adoption is broad, with smartphone penetration at 70.6%. But widespread adoption alone does not guarantee stronger returns; operators still need customers to buy data bundles at prices that fund investment and deliver value without pushing connectivity beyond consumers’ budgets.

But prepaid, a crucial segment in South Africa’s mobile market, remains under pressure. Prepaid revenue declined by 3% in the nine months and by 2.4% in the third quarter, although the latter was an improvement on the 3.2% contraction in the previous quarter. MTN’s prepaid customer base fell 6.9% to 27.4 million, while its total South African customer base declined 2.7% to 39 million.

The company has pointed to a deliberate focus on a healthier, more valuable prepaid customer base, alongside pressure in the consumer voice market and lower mobile termination rates. The challenge is not uniform across MTN’s footprint. In some of its other major markets, the operator is translating data demand into stronger revenue growth. Nigeria’s data revenue grew 31.4% in the third quarter, while Ghana recorded 39.9% growth. South Africa’s 6% increase was comparatively modest, suggesting that the group’s data monetisation story is being shaped by differing market dynamics.

MTN’s experience in Uganda offers another illustration of how competition over access can affect the economics of mobile data. The company said data revenue growth there slowed to 7.8% in the third quarter, from 17.5% in the previous quarter, partly because unauthorised public Wi-Fi resellers were drawing usage away from mobile data.

The disclosure does not quantify how much revenue was diverted, nor does it indicate that the same pattern is occurring in South Africa. Still, it highlights a broader challenge for telecoms operators, as alternative connectivity channels increasingly compete with mobile networks for control over internet access and the revenue it generates.

MTN is responding in South Africa with a focus on restoring service revenue growth to the low-to-mid single digits over the medium term, while expanding home connectivity through fixed wireless access and fibre. It is also working to improve profitability: third-quarter Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 7%, and its margin expanded by 3.6 percentage points to 38.1%, reflecting early benefits from cost interventions.

MTN South Africa’s third-quarter results showed an improvement in profitability, with EBITDA rising 7% and its margin expanding to 38.1%. However, service revenue remained flat in the quarter, while the customer base continued to contract. The company’s stated priority is to build on the improved prepaid trends and cost reductions to restore service revenue growth to the low-to-mid single digits over the medium term.

Across MTN’s footprint, data is powering growth, contributing 50.4% of group service revenue in the first nine months of 2026. But in South Africa, where customers are using more data without a corresponding rise in revenue, that opportunity remains harder to capture.