When households in South Africa come under financial pressure, spending on cellular services is among the first things they cut back, according to the latest Old Mutual Savings and Investment Monitor.

Old Mutual’s survey of South Africans aged 18 to 65 who are employed found that people’s top financial priority remained income and job security, followed by cutting expenses and managing debt.

Although cost-cutting remained a top priority, Old Mutual’s 2025 survey results showed that financial pressures on people earning R8,000 or more per month appeared to be easing.

It also showed that 42% of working South Africans are optimistic about the country’s economy, up from 36% in 2024.

At the same time, over 7 in 10 working South Africans are optimistic and believe their financial situation will improve in the next 6 months.

While there has been some improvement since last year, 23% of respondents said they have adapted their lifestyles by switching to the cheapest cell phone or data plan.

This is down from 27% last year, following the trend of consumers overall taking a more relaxed stance to cost-cutting. However, it remains high with over 1 in 5 people saying they cut cellular spending.

Interestingly, the impact of people’s cost-cutting is not immediately evident in the revenue and service revenue figures of Vodacom, MTN, and Telkom.

At the same time, MTN and Telkom’s subscriber bases grew, while Vodacom’s contracted in 2025. However, Vodacom explained that its decline in prepaid subscribers was due to churning inactive SIMs on its network.

These SIMs were added during aggressive promotional campaigns in the 2023/24 financial year, and many of them did not transition to regular cellular packages.

However, two indicators that end-users cut back on their cellular spending were declining average revenue per user across all operators and Vodacom South Africa’s operating profit.

Vodacom South Africa’s operating profit reached R21.1 billion in 2022, then declined in 2023 and 2024. It returned to growth in 2025.

Vodacom reported that its operating profit in South Africa decreased to R20.9 billion in 2023 and R20.1 billion in 2024. In 2025, Vodacom SA’s operating profit grew to R20.5 billion.

Expense management strategies	OMSIM 2024	OMSIM 2025
Cheaper TV streaming options	32%	29%
Switch to cheaper supermarket brands	30%	25%
Cut down on domestic help	29%	24%
Move to cheapest cell phone or data options	27%	23%
Given up gym subscriptions	26%	22%
Put major purchases on hold	22%	18%
Maintain and repair rather than replace big items	22%	18%
Cash in investments/savings early	15%	–
Downgraded on rented property	14%	12%
Moving children to cheaper school	13%	11%
Switching or trading down vehicle	12%	11%

Average revenue per user declines

A sure sign that people in South Africa have been spending less on cellular service was the decline in average revenue per user (ARPU) reported by Vodacom, MTN, and Telkom.

An analysis of their annual financial results since 2020 shows that MTN SA’s ARPU has declined substantially in the past six years, while Telkom has seen year-over-year declines since 2021.

Meanwhile, Vodacom SA’s blended ARPU is higher than it was in 2020, but lower than its high in the 2021 financial year.

Operators have highlighted that the economic environment in South Africa has been challenging for consumers, with high interest rates and inflation limiting people’s disposable income.

They also noted that credit rejection rates among people applying for contracts had increased, further illustrating the financial pressures South Africans were facing.

Such credit rejections sometimes push potential contract customers back to prepaid or cause prepaid users to cycle through SIMs in search of the best short-term value.

Many people also can’t afford to buy higher-end smartphones without a contract. Operators have responded by offering three-year and four-year contracts with lower monthly premiums.

Mobile operator ARPU in South Africa

Source: MyBroadband