every south african The banks that have launched a mobile virtual network operator (MVNO) – Capitec, FNB, Standard Bank, Nedbank and soon Absa – have built their mobile businesses on phone numbers they do not control.
The International Mobile Subscriber Identity (IMSI) built into each SIM card is associated with the host network. The phone number – MSISDN – belongs to the subscriber, who can port it between networks at will. The bank does not control anyone. This is not a design flaw; This is a structural feature of South Africa's numbering structure. And the business consequences of the scale these businesses have reached have remained largely unexamined.
An MVNO sells mobile services under its own brand without ownership of the network. Capitec Connect, FNB Connect, Standard Bank Connect, Nedbank Connect and the upcoming Absa Control offer billing, pricing, customer relations and apps. No one controls the IMSI range from which each subscriber's network identity is generated. In South Africa, Icasa only provides IMSI ranges to spectrum license holders, and MVNOs do not own any spectrum. The range behind Capitec Connect is registered in Cell C.
MSISDN is portable – mobile number portability gives each subscriber the right to move their number to another network – but this right belongs to the subscriber, one number being used at a time. The MVNO cannot port on behalf of the customer. So Capitec owns the billing layer and the relationship, Cell C owns the underlying network identity and the customer owns the number. It is up to each customer to choose how to perform any migration work.
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Capitec Connect is the clearest illustration because it is the most revealing. It generated net income of R442 million in the year to February 2026, more than double the previous year's R193 million, with 1.5 million active customers – one of the most successful product launches in South African banking history. It is also built on network identities that the bank does not control and numbers to which it cannot transfer without each customer's individual consent.
To switch hosts, Capitec must issue a new SIM to each customer or reassign an embedded SIM (eSIM) to the new network, then coordinate portability requests for each. Mobile number portability exists; Bulk IMSI portability is not, and is not on Icasa's agenda. This step will be customer by customer.
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Standard Bank's switch from Cell C to MTN in June 2024, which covered about 300,000 customers, showed that migration is possible. This also explains why no banking MVNO has attempted to do this at scale: at 1.5 million customers, the cost, time, and idle churn of customers who never complete the port make it commercially prohibitive as a near-term answer to host reevaluation. A conservative 10-15% passive churn would mean losing 150,000 to 225,000 customers. Every host operator knows this arithmetic. Every banking MVNO board does the same.
In April 2026, Capitec Free calls between Capitec Connect numbers. The logic is clear: get your family on the network and call them for nothing. The effect is a closed user group – a switching cost built into the relationship itself.
This binds Capitec to Cell C more tightly than any contract clause. Every customer who joins for free family calls will be opposed to moving to a new SIM on a different host, as this move breaks up on-net profits. The more successful the proposal, the larger the base and the more restrictive migration will be. Capitec's clients are doing work that Cell C lawyers would otherwise do.
Capitec Connect projects 768 million voice minutes to be delivered in the year to February 2026. Those minutes are now free to make – but not free to take. At the time of renewal, cell C interacts with structural strength. Capitec's only real lever is future growth: slowing new activations on Cell C while the existing base remains intact. The base cannot move. This is a much weaker hand than the language of interdependence.
Dependence becomes deeper
Cell C hosts 13 of South Africa's 23 MVNOs, and its return to profitability after years of restructuring now depends heavily on that wholesale business. Yet Cell C has no towers: its coverage comes from roaming agreements with MTN and Vodacom, which include a Multi-Operator Core Network (MOCN) overlay. MTN has said it wants to become South Africa's leading MVNO wholesaler; Vodacom has entered the hosting market. Both now compete with Cell C for MVNO customers – and both are infrastructure on which Cell C itself depends. Dependencies are a stack, and decisions at the top ripple down through every layer.
Nor is Capitec alone. FNB Connect's numbers sit with Cell C, Standard Bank Connect's numbers with MTN, Nedbank Connect's numbers with MTN. No South African bank has a single customer MSISDN. Each faces the same renewal dynamics: the host negotiates by power, and the bank's leverage extends only to its future growth, not its existing base.
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FNB has already hinted at this route in 2023, having signed MTN as the second supplier for FNB Connect with Cell C – although there is little public evidence that its base has yet been provisioned on MTN.
Dual-hosting limits future concentration risk without forcing re-SIM of existing base. But it doesn't eliminate dependency – it manages it – and it breaks down the feature that creates the strongest switching costs. Capitec's free on-net calls work precisely because each customer sits on a Cell C core. Split the base across two hosts and the free-calling proposition breaks down where it was meant to be delivered.
The long-term recovery is regulatory, but with serious expectations. Separating IMSI assignment from spectrum licensing will solve the problem from its roots. The International Telecommunication Union's E.212 framework explicitly allows mobile network codes to be allocated to full MVNOs without spectrum, as is the standard in the US, UK, Germany and most of Europe. The case is technically and comparatively strong. The South African reality is not: IMSI portability is not on Icasa's agenda, the Electronic Communications Amendment Bill does not address it and the realistic path from sustained lobbying to implementation takes 7-10 years.
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Banking MVNOs are a bank's weapon in the convergence race against operators pushing into financial services from the other side. It captures behavioral data between transactions, multiplies switching costs and – as Capitec shows – makes real money. But mitigations reduce risk without eliminating it. Dual-hosting manages future exposure while the existing base remains dependent. Regulatory reform now comes too late to protect anyone. None of this even touches on the dynamics in the next wholesale renewal – privately, on undisclosed terms, between a host that controls the infrastructure and a bank whose most successful product has made migration less viable since the day it launched.
The Connectivity product is the gateway to the most valuable relationships in South African retail finance. Most of the banks are busy in making better doors. Terms are those of the host.
- Author, Pambos Soteriadesis a telecommunications and strategy consultant with 28 years of experience in African mobile markets, including executive roles at Vodacom Group and Telkom Kenya. He has worked on both the operator and MVNO sides of the South African MVNO market. He is not affiliated with, employed by or invested in any institution, operator or MVNO mentioned in this article
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