Every South African bank that has launched a mobile virtual network operator – Capitec, FNB, Standard Bank, Nedbank and the soon‑to‑appear Absa offering – is built on phone numbers it does not control. The International Mobile Subscriber Identity (IMSI) embedded in each SIM belongs to the host network, while the mobile number (MSISDN) resides with the customer, who can port it at will. This three‑party split is not a design flaw; it is baked into South Africa’s numbering framework, yet the commercial fallout remains largely unexamined.
An MVNO sells mobile services under its own brand without owning any spectrum. Capitec Connect, FNB Connect, Standard Bank Connect and Nedbank Connect manage billing, pricing and the customer relationship, but none can assign the IMSI range that defines a subscriber’s network identity. In South Africa, Icasa only allocates IMSI blocks to spectrum‑holding licencees, so the range behind Capitec Connect is registered to Cell C, while other banks sit on MTN or Vodacom cores.
Because Mobile Number Portability (MNP) is a consumer right, the bank can never move a number on a subscriber’s behalf. The MVNO therefore owns the relationship layer, the host owns the network layer, and the customer owns the number. Any migration requires each user to consent to a new SIM or eSIM provisioning and then file a separate MNP request – a process that the regulator has no bulk‑porting mechanism for.
Capitec Connect illustrates the scale of the problem. In the year to February 2026 it posted R442 million in net income, more than double the R193 million recorded the previous year, and it now serves 1.5 million active users. Yet its entire subscriber base sits on Cell C’s IMSI block. To switch hosts, Capitec would have to issue a new SIM or re‑provision an eSIM for every single customer and coordinate an individual portability request. The cost, time and inevitable passive churn make such a move commercially prohibitive.
Standard Bank’s migration from Cell C to MTN in June 2024 demonstrated that a host switch is technically possible – it involved roughly 300 000 subscribers. However, at Capitec’s scale even a conservative 10‑15 % passive churn would translate to 150 000‑225 000 lost customers, a figure that every boardroom is painfully aware of. The risk is compounded by Capitec’s own strategy of offering free calls between its own numbers, effectively creating a closed‑user group that further entrenches customers on the Cell C core.
The hidden cost of the banking MVNO model
| Bank MVNO | Host network | IMSI ownership | Subscriber base (2026) |
|---|---|---|---|
| Capitec Connect | Cell C | Cell C | 1.5 million |
| FNB Connect | Cell C (primary) / MTN (secondary) | Cell C & MTN | 900 000* |
| Standard Bank Connect | MTN | MTN | 650 000 |
| Nedbank Connect | MTN | MTN | 580 000 |
| Absa Connect (launching 2027) | TBD | TBD | – |
*Indicative figure based on latest public disclosures.
The table highlights that no South African bank owns a single MSISDN; all rely on a third‑party host for the network identity. This structural dependency limits the banks’ negotiating power to future growth, not the protection of an existing customer base.
Cell C alone hosts 13 of the country’s 23 MVNOs and has rebuilt profitability largely on wholesale revenue, even though it owns no towers. Its coverage rests on roaming agreements with MTN and Vodacom, and a multi‑operator core network (MOCN) is being rolled out. MTN and Vodacom are now courting MVNOs as wholesale partners, meaning the very hosts that power the banks are also competing for the same wholesale contracts – a “stack” where decisions at the top reverberate downwards.
Dual‑hosting, as FNB attempted in 2023 by signing MTN as a second supplier alongside Cell C, can dilute concentration risk without requiring a costly re‑SIM of the existing base. Yet it also fragments the single‑core advantage that free on‑net calls provide. When subscribers are split across two cores, the call‑free benefit disappears, eroding the primary switching cost that banks have built into their offers.
A regulatory fix would require decoupling IMSI assignment from spectrum licensing. The International Telecommunication Union’s E.212 framework already permits full MVNOs without spectrum to receive their own mobile network codes – a model used in the US, UK, Germany and much of Europe. In South Africa, however, IMSI portability is not on Icasa’s agenda, and the current Electronic Communications Amendment Bill makes no mention of it. Even with sustained lobbying, experts estimate a 7‑10 year timeline before any such reform could be implemented.
The banking MVNO is a strategic weapon in the convergence race, allowing banks to harvest behavioural data, heighten switching costs and generate substantial revenue. Yet the structural dependency on host operators remains a latent vulnerability. Dual‑hosting mitigates exposure but does not eliminate it, and regulatory change is unlikely to protect the current generation of MVNOs from the next wholesale renewal – a private negotiation that could dramatically reshape cost structures and customer lock‑in.
In practice, the connectivity product is the doorway to the most valuable relationship in South African retail finance. Banks are busy polishing that door, but the hinges belong to the network hosts. As the market matures, the balance of power will hinge on whether regulators eventually untangle the IMSI‑spectrum link or whether banks find new ways to internalise the network layer without compromising their core banking operations.