DUNCAN McLEOD: It’s banks vs telcos in the new battle for consumers

There was a time, not all that long ago, when a ringing phone meant something. Today it usually means a scammer pretending to be from your bank or a relentless pitch for a funeral policy you didn’t ask about.

According to caller-ID app Truecaller, South Africans were hit with more than 5.3-billion spam calls in the first two months of 2026 alone. That puts the country on track to exceed last year’s total of about 30-billion.

The volume is staggering, and it’s doing something profound to the way South Africans use their phones: we don’t answer them any more. Or, more precisely, a growing share of us answer only when we know who is calling. The unknown number now triggers suspicion by default. A phone call has become something to be avoided rather than received.

Anyone with a teenager will tell you Gen Z do not call; they text — usually on WhatsApp, where there’s no airtime meter ticking. Older generations are following suit. The dialler app is disappearing from the dock, replaced with WhatsApp and other messaging services.

South Africa’s mobile data networks are now good enough that a WhatsApp call will, more often than not, work as well as a circuit-switched one. Hence the commoditisation of something the mobile operators once charged R2.50 a minute or more to carry.

The disruption is being led by mobile virtual network operators (MVNOs), which piggyback on the big networks’ infrastructure. Capitec Connect, an MVNO on Cell C, last week made calls between its own SIMs free. Melon Mobile, an MVNO on MTN, has bundled effectively unlimited voice into its plans for years. MTN’s response, a new digital sub-brand called Pi, offers 500 voice minutes for R79 a month — under 16c per minute.

How did we get here? Three forces have worked in parallel:

• The first is regulatory. Communications regulator Icasa’s long glide path on mobile termination rates, from a peak of R1.25 a minute 16 years ago to 7c today and dropping to 5c in July, broke the wholesale price floor that had been propping up retail call prices.
• The second is technological: the migration from circuit-switched voice on 2G and 3G networks to packet-switched voice on 4G meant a minute of call time stopped being a separate product with its own infrastructure and became, in effect, a small slice of data traffic.
• The third, and most important, is substitution: WhatsApp, smartphones and good-enough mobile broadband gave consumers a free alternative that worked, and once they had it, they were never going to pay R2.50 per minute again.

The strategic fight is no longer over minutes or megabytes. It is over the customer relationship that sits on top of them

Data is following a similar trajectory, although not all the way to zero. Demand growth and capex obligations will keep megabytes from becoming as worthless as minutes. But the per-megabyte model is dying. Data is being repriced as a flat-rate utility, sold in large-cap or “uncapped” bundles where the unit price is invisible.

The marginal cost of a megabyte is also trivial. Capacity is expanding faster than demand: uncapped fibre is expanding into millions of homes, while fixed-wireless access is eating into both fibre and mobile broadband.

So, the strategic fight is no longer over minutes or megabytes. It is over the customer relationship that sits on top of them. And that fight is now well under way, with two industries converging on it from opposite directions.

Banks are selling mobile services on top of their banking relationships — Capitec Connect last week made on-net calls free and expanded smartphone financing through its app. Mobile operators are selling financial services on top of their mobile relationships — Vodacom through VodaPay, MTN through MoMo, both with growing insurance and lending arms.

The same product is taking shape from opposite ends: voice and data as a value-added service on top of a banking relationship, and financial services as a value-added service on top of a mobile relationship. Which way feels more natural to the consumer will come down to who they trust more.

That fight is not yet won. Vodacom and MTN are not short of options — VodaPay and MoMo are real businesses with millions of users — but in South Africa neither has yet built the kind of trusted, daily-use financial relationship that a primary bank account confers.

People will switch mobile providers over a R20 saving; they will not move their salary, their savings and their default payment behaviour for anything close. The banks are happy to give connectivity away. It was never going to be where they made their money. For the operators, that is the trap: defending a business the other side is willing to price at next to nothing.

McLeod is editor of TechCentral