In a strategic move set to reshape South Africa’s fast-evolving telecoms market, Absa Group is preparing to launch its own mobile virtual network operator (MVNO), directly challenging existing banking-based mobile services such as Capitec Connect and FNB Connect.
According to Cell C CEO Jorge Mendes, Absa has shortlisted two wholesale network providers for the initiative, with Cell C confirmed as one of the finalists. The other company’s identity remains undisclosed. The new operator will mark Absa’s official entry into telecommunications, reinforcing its digital ecosystem around banking, fintech, and connectivity services.
A Banking Giant Enters the Telecom Arena
The move positions Absa as the latest financial institution to expand into mobile services, leveraging customer loyalty and digital integration. Absa’s upcoming MVNO will ride on existing infrastructure provided by a licensed mobile operator—most likely Cell C or another major carrier.
This expansion reflects a broader shift among South African banks seeking to deepen customer engagement through telecom offerings. By bundling data plans, mobile banking, and financial rewards, these institutions aim to secure greater user retention in an increasingly competitive digital marketplace.
Capitec Connect and FNB Connect have proven this model’s viability. Capitec Connect, for instance, launched in late 2022 and reached over 1.1 million active SIMs by August 2025, illustrating how data-driven financial ecosystems can accelerate user growth.
Cell C’s Dual Strategy: Wholesale Growth and Retail Adjustments
For Cell C, Absa’s MVNO ambitions represent both opportunity and competition. Mendes revealed that approximately 10% of Cell C’s total revenue now stems from wholesale partnerships, underscoring the MVNO segment’s growing importance.
The company has been repositioning itself around wholesale network services, supported by a revised deal with Pepkor and the acquisition of Shoprite K’nect customers. These moves highlight Cell C’s focus on expanding its retail distribution and stabilizing revenue through diversified partnerships.
At the Digital Council Africa’s Conext Conference in Bryanston, Mendes announced that Cell C had joined FoneYam, a Pepkor-backed smartphone rental business operating across Pep, Ackermans, and Dunns stores. FoneYam offers 13-month smartphone rentals bundled with insurance against theft, loss, death, and disability — a model that complements Cell C’s retail penetration strategy.
Additionally, Cell C’s integration of Shoprite K’nect’s 150,000 subscribers marks an experimental expansion of its MVNO framework. Mendes said the company had already begun testing the service internally, with plans to roll out across Shoprite’s 3,000 outlets, potentially converting part of its 8.7 million money market customers into telecom subscribers.
The Broader MVNO Landscape: A Double-Edged Sword for Cell C
While MVNO partnerships have driven revenue and subscriber growth, they also intensify competition for Cell C. The operator’s core subscriber base has declined from 10.7 million in 2022 to 7.6 million in May 2025, signaling continued erosion of its prepaid and postpaid markets.
However, when including MVNO subscribers such as Capitec Connect users, Cell C’s overall base shows an upward trend since late 2023. The company attributes much of its growth to Capitec’s success — but that same success underscores the challenge of retaining brand identity and control in a network-sharing environment.
Compounding this issue, larger rivals MTN and Vodacom have entered the MVNO space following new spectrum licensing conditions from regulator Icasa, eroding Cell C’s early advantage. Telkom is also preparing to join the MVNO race, further tightening competition in South Africa’s saturated telecom market.
The shifting landscape has already cost Cell C several key partnerships, including Standard Bank Mobile and the exclusivity of its earlier FNB Connect deal — once a hallmark of its enterprise strategy.
Absa’s Digital Future
Absa’s entry into the MVNO arena aligns with its broader strategy to enhance customer connectivity, digital payments, and financial inclusion. By integrating mobile services into its core banking platform, Absa aims to offer seamless digital experiences — from mobile money to data rewards and integrated app ecosystems.
The move mirrors a growing trend across Africa, where financial institutions are increasingly crossing into telecom sectors to capture value in digital infrastructure and consumer data. If Absa’s MVNO launch succeeds, it could redefine the competitive balance between South Africa’s financial and telecommunications giants.
While Cell C hopes to secure the wholesale contract, the battle for Absa’s business — and for the future of South African mobile banking — has only just begun.
