Capitec wants to challenge Vodacom and MTN

Capitec has ambitious plans to grow its mobile network service from 1.6 million clients to 10 million in the next two to three years, which would make Capitec Connect one of South Africa’s largest mobile operators.

Capitec launched Capitec Connect in 2022, joining several other large financial institutions, including Standard Bank and FNB, in entering the telecommunications market.

While this seems like an unusual move for a bank, it makes sense. Many South Africans already purchase data and airtime through their banks, and setting up a mobile network service is an easy way for them to expand their offerings.

However, it is important to distinguish between mobile network operators (MNOs) like MTN and Vodacom and mobile virtual network operators (MVNOs).

MTN and Vodacom are traditional telecommunications companies in the sense that they own the network infrastructure, including cellular towers.

These companies also buy and hold spectrum licences from the government, which allows them to operate their networks.

Running a mobile operator and maintaining a network are expensive endeavours, requiring significant investments in technology, infrastructure, and ongoing maintenance.

In contrast, MVNOs like Capitec Connect, FNB Connect, and Standard Bank Mobile do not own their own infrastructure. Instead, they use the networks of established providers.

This makes it significantly cheaper and far easier for these companies to provide a mobile service offering, as they do not need to build their own network infrastructure or purchase spectrum.

Capitec Connect and many other MVNOs in South Africa, including FNB, Mr Price, and Shoprite, use Cell C’s network.

Cell C and Capitec announced this partnership in 2022, a few years after other major banks like FNB and Standard Bank launched their MVNOs.

This meant Capitec Connect was entering a market already dominated by several mobile giants, including MTN and Vodacom. Many new entrants also battle for market share.

In other words, Capitec Connect’s offering had to be either unique or attractive enough to stand out from the competition.

This is why, when the service launched, the bank announced its MVNO would offer data that does not expire and some of the most inexpensive data offerings on the market.

From 0 to 1.6 million — then 10 million

While many expected Capitec Connect to fly under the radar like many other MVNOs have, the service has proven to be a boon for the banking giant.

Since its launch in 2022, Capitec Connect has experienced significant growth. The bank’s 2025 financial year results revealed that the service has grown to 1.6 million clients, a 73.7% year-on-year increase.

While this is far less than Vodacom’s 45 million customers and MTN’s 39.2 million users in South Africa, it is very impressive for an MVNO.

In comparison, Standard Bank Mobile, which launched in 2018, had 300,000 mobile customers as of June 2024.

However, Capitec CEO Gerrie Fourie said in the bank’s 2025 results presentation that he is eyeing to grow Capitec Connect’s client base to 10 million in the next two to three years.

According to Fourie, this plan is not as ambitious as it may sound. Capitec already has a client base of 24 million – they just need to attract more of those clients to the mobile network offering.

“We’ve got 24 million clients, we’ve got 13 million app clients, we’ve got 11 million value-added service clients, and we’ve got 10 million clients that are buying prepaid through us,” he told Daily Investor.

“So, we need to go and create value for them and let them understand Capitec Connect.”

This is why the bank has focused on how it “packages” Capitec Connect for clients, by adding more bundles and different options to the offering.

When asked whether the bank will also pursue clients outside of Capitec’s existing base for the mobile service offering, Fourie said he would rather focus on creating value for the bank’s clients.

“I’m not a spreadsheet person. I look at the market. If you look at the market and the number of clients, Vodacom is great, MTN has great, Telkom is great, and the majority of clients have two to three SIMs,” he said.

“So, there’s about 80 to 90 million clients with SIMs in their pockets, 1.6 million is nothing, so I’d rather focus on creating value for our clients and giving them the right packages than to focus on the numbers.”

It is no surprise that Capitec is so insistent on growing its MVNO client base when looking at the service’s financials.

The bank’s latest annual results revealed that Capitec Connect’s net income increased by 451%  from R35 million to R193 million between 2024 and 2025.

This incredible growth was driven by a 74% increase in subscribers with active SIM cards within the last six months to 1.6 million.

The bank also announced that it will introduce additional benefits in the 2026 financial year to reward Capitec Connect customers for good banking behaviour.

This article was first published by Daily Investor and is reproduced with permission.