MTN’s South African data boom is not translating into revenue growth

MTN South Africa's mobile data consumption has surged, but the operator is struggling to convert that surge into increased revenue. Data revenue grew by 4.7% in the first nine months of 2026, rising slightly to 6% in the third quarter, according to the latest financial update. However, overall service revenue only saw a 1% year-on-year increase and remained flat in the quarter.

This disparity highlights a common issue for telecom companies across Africa: simply increasing data usage doesn't automatically lead to higher profits.

Ralph Mupita, MTN Group's CEO, admitted that MTN SA's service revenue in Q3 2026 fell short of its medium-term growth goals. While service revenue remained flat, it was up 1.0% year-on-year. Mupita noted a positive trend in prepaid usage, which is a key segment in South Africa's market. Data traffic across MTN's network increased by 27.9% in the nine months, with postpaid customers using an average of 32.8GB of data each month. Prepaid data consumption also grew by 28.9% to 5.2GB per month.

Mobile internet adoption in South Africa is widespread, with 70.6% of the population owning a smartphone. Yet, simply having a large number of smartphone users doesn't guarantee higher revenues for operators. Operators still need customers to purchase data bundles at prices that fund investments and deliver value without making connectivity unaffordable for users.

The prepaid segment, which is crucial in South Africa's market, is facing challenges. Prepaid revenue declined by 3% in the nine months and by 2.4% in the third quarter, while the operator's prepaid customer base dropped 6.9% to 27.4 million. In contrast, MTN's prepaid customer base fell 2.7% overall, to 39 million.

The issue of data monetization is not uniform across MTN's various markets. In Nigeria and Ghana, for instance, data revenue grew significantly more—31.4% in the third quarter and 39.9%, respectively. South Africa's modest 6% increase suggests that the company's data monetization efforts are being influenced by different market dynamics.

Another example from Uganda illustrates how competition for access can impact mobile data revenue. MTN's data growth slowed to 7.8% in Uganda's third quarter, down from 17.5% in the previous quarter, partly due to unauthorized public Wi-Fi resellers diverting usage away from mobile data. While MTN does not quantify the revenue loss in Uganda or determine if the same pattern is happening in South Africa, it underscores a broader challenge for telecom operators as alternative connectivity options compete with mobile networks for control over internet access and the revenue it generates.

MTN South Africa is taking measures to address these challenges. The company aims to restore service revenue growth to the low-to-mid single digits over the medium term by focusing on improving prepaid trends and cost reductions. In the third quarter, EBITDA rose by 7%, and the profit margin expanded by 3.6 percentage points to 38.1%, indicating early benefits from cost-saving initiatives.

MTN South Africa's third-quarter results showed an improvement in profitability, but the company's service revenue remained flat, and its customer base continued to decline. The company recognizes that while data is driving growth, capturing the full revenue potential of increased data usage in South Africa remains a challenge.