Vodacom and MTN have signalled a positive shift in their South African operations. This comes as the two giants continue to feel the effects of consumers under pressure looking for value, a factor that has weighed on their prepaid businesses. Despite having more customers outside the country in fast-growing markets like Egypt for Vodacom and Nigeria for MTN, South Africa remains an important anchor for both businesses. For both JSE-listed operators, investors are concerned about the anaemic growth at home, which appears to follow the country’s paltry economic expansion.The outlook has been more positive over the past year, with operators hoping that this translates into better prospects for consumers. (Dorothy Kgosi) South Africa’s GDP growth for 2025 came in at 1.1%, a much better print than the 0.5% recorded in 2024, although it undershot the National Treasury’s estimate of 1.4%. In February the Treasury predicted GDP expansion of 1.6% in 2026, but the IMF has cut its own forecast to 1% from an earlier 1.4%, citing the Middle East war, a development that has disrupted many forecasts for the global economy.In the quarter ended March, MTN South Africa’s service revenue growth edged up 0.7% despite competitive pressure on the prepaid market, while Vodacom South Africa grew 2.8% on the same measure, driven by “an improved prepaid performance and contract wins”.Even then, the wireless carriers have both highlighted positive momentum in prepaid, the largest customer segment across South Africa’s mobile sector. South Africa’s largest mobile operators have experienced pressure in their prepaid efforts in recent years as consumers came under strain in the economic downturn. They have also had to deal with increased competition from Telkom, the country’s fastest-growing mobile business, as well non-telecom players like Capitec and FNB. In the past, cellphone providers could rely on postpaid or contract customers to provide a constant, predictable income stream. The shift towards prepaid customers means companies face greater revenue sensitivity as customers are more easily able to reduce their voice and data spending.In Vodacom’s full-year earnings report to March, prepaid mobile customer revenue decreased 2.1% to R26.7bn. In the fourth quarter, the decline in prepaid mobile customer revenue “moderated” to 1.6% compared with a 3.6% decline in the prior three-month period. The company’s prepaid base of 39.1-million customers increased 0.4%. Vodacom CEO Shameel Joosub noted a “focus on the quality of gross adds”, explaining that the positive momentum was “supported by an improving prepaid trend in the fourth quarter, strong data demand and continued growth in beyond-mobile services”.In MTN’s case, South African data revenue increased by 4.9%, but fintech revenue decreased by 18.1%, while reported earnings before interest, tax, depreciation and amortisation (ebitda) declined by 12.5% in the quarter.MTN’s Ralph Mupita said the South African unit delivered “a mixed performance in the period, with continued growth in postpaid, enterprise and data partially offset by the impact of deliberate actions taken to reset the prepaid base with regard to the contribution from XtraTime.” The company recently took a decision to scale back its airtime lending business in favour of customers who recharge with cash. “These actions weighed on short-term revenues but are intended to improve the sustainability and profitability of the prepaid business over the medium term,” it said. “The group continues driving initiatives to improve performance, particularly in South African prepaid,” Mupita said. MTN has retained its medium-term guidance, which targets service revenue growth of “low to mid-single digits” for MTN South Africa. Elsewhere, the operators are pushing a number of initiatives to boost their local operations. After a four-year battle, Vodacom completed the R13bn merger of its fibre business with that of Remgro’s Maziv at end-2025. That has put the group at the top of South Africa’s growing fibre market, with Maziv’s Vumatel the largest fibre-to-the-home player. In April, MTN took a page out of its overseas counterparts’ playbook with a mobile virtual network operator unit called Pi, a move that sets it up to compete against non-traditional players such as Capitec.