How Telecom Companies Generate Revenue in Africa

From voice to data to money: The evolution of the continent’s most profitable infrastructure business

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EXECUTIVE INTRODUCTION

The African telecommunications industry is a mature business in search of a new growth story. The old story — adding millions of new subscribers each year as mobile phones reached previously unconnected populations — is ending. Market saturation has set in across key countries including Nigeria, South Africa, and Kenya, with multiple SIM ownership pushing penetration levels close to population size .

The new story is being written in data, money, and enterprise services. It is a story of operators transforming from connectivity providers to digital lifestyle platforms — selling internet access, financial services, cloud computing, and even advertising. The margins on traditional voice and SMS are collapsing under pressure from WhatsApp and other over-the-top (OTT) platforms. But the margins on mobile money lending, data bundles, and enterprise connectivity are healthy — sometimes spectacularly so.

This profile examines how telecom companies in Africa generate revenue in this new environment: the shift from voice to data, the explosive growth of mobile financial services, the rise of enterprise and wholesale offerings, and the emerging experiments with ad-supported connectivity and network slicing. It draws on financial and operational data from the continent’s largest operators — MTN Group, Vodacom Group (including Safaricom), Airtel Africa, and Orange — to build a comprehensive picture of the sector’s revenue architecture.

The telecom operator is no longer just a phone company. In Africa, it is a bank, a payment processor, a cloud provider, and sometimes even a media company. Understanding how these revenue streams fit together is essential to understanding the continent’s digital economy.

THE REVENUE STREAMS: A HIERARCHY

African telecom operators generate revenue from four primary sources, each with different growth trajectories, margins, and strategic importance.

Revenue Stream 1: Data Services (The Growth Engine)

Data is now the single largest revenue driver for most African telecom operators. As subscriber growth plateaus, operators are pivoting aggressively toward mobile data services, benefiting from rising smartphone penetration, increased video streaming, and expanding social media usage .

Key trends in data revenue:

Why data margins are compelling: Unlike voice, where termination rates are regulated and competition compresses pricing, data allows operators to segment the market finely. A heavy user pays more (or consumes a larger bundle) than a light user. Time-of-day pricing, application-specific bundles (social media passes, video passes), and speed-tiered plans all allow operators to extract more value from high-demand users.

The revenue growth, however, has not yet fully translated into improved profitability across the board. Intense competition, regulated tariffs, and rising operating costs — driven by inflation, foreign exchange pressures, and high energy expenses — continue to weigh on margins .

Revenue Stream 2: Mobile Money & Financial Services (The Margin Engine)

If data is the growth engine, mobile money is the profit engine. Margins on financial services are significantly higher than on connectivity — and the market is enormous.

Global mobile money market (2025):

• Total transaction value reached $2 trillion, doubling in just four years after taking two decades to reach the first trillion 

• Registered accounts climbed to 2.3 billion (increase of 268 million)

• Monthly active accounts rose 15% to 593 million — the strongest gain since 2021 

• Africa led the surge, adding the bulk of new registered and active accounts, remaining the world’s main hub for mobile money use 

Operator-specific mobile money performance (2025-2026):

The platform pivot: The most significant development in mobile money is the shift from simple transfers to full financial services. At M-Pesa, 46.4% of revenue now comes from lending, savings, and merchant services, rather than basic person-to-person transfers . Products like M-Shwari and Fuliza in Kenya generated 14 billion rand in revenue .

Competitive landscape in mobile money:

The market is becoming more contested. Lower-cost fintechs like Wave (Senegal-based, capping transfer fees at 1%) are moving into Vodacom’s territory, having incorporated a local entity in Kinshasa and entered a payment partnership with Ecobank Group’s Congolese unit . In Nigeria, fintechs OPay and PalmPay led the mobile money market, with telecom operators trailing .

Revenue Stream 3: Voice & Messaging (The Legacy Decliner)

Voice and SMS were once the foundation of telecom revenue. No longer. Over-the-top platforms such as WhatsApp and other messaging services continue to erode income from calls and SMS .

Why voice is declining but not dead:

Operators have responded by bundling voice into data plans (making it a zero-margin add-on) and focusing on enterprise voice solutions (where quality and reliability still command premiums).

Revenue Stream 4: Enterprise & Wholesale Services (The B2B Frontier)

Business-to-business services are a growing revenue stream for African telecom operators. These include:

A tier-1 West African operator, for example, deployed an advanced data monetization platform to offer application-based data passes, speed-based plans, and personalized promotions — achieving zero revenue leakage through real-time service deactivation .

New entrant: e& Carrier & Wholesale Services opened a new strategic hub in Johannesburg in 2025, serving as a gateway to Africa’s rapidly growing digital markets. The hub supports telcos, hyperscalers, cloud providers, and enterprises with next-generation connectivity, offering AI-driven and automated solutions .

Revenue Stream 5: Emerging Models (The Future Pipeline)

Operators are experimenting with new revenue models beyond traditional connectivity and financial services.

Ad-supported internet: Tizeti Network Limited has rolled out an ad-supported internet access platform across all its hotspot locations in Nigeria and Ghana. Users voluntarily watch short video advertisements in exchange for data rewards — converting advertising engagement into free connectivity. The platform serves over 2.5 million active users, with advertisers accessing inventory through Google Ad Manager’s unified demand ecosystem .

Network slicing (5G enterprise): As standalone 5G networks roll out, network slicing allows operators to offer virtual network segments with guaranteed performance for specific enterprise applications. Operators such as MTN, Vodacom, Safaricom, and Telkom are developing enterprise connectivity solutions for sectors including mining, manufacturing, logistics, and energy. Private 5G deployments in mining operations, for example, support automation and real-time monitoring through multi-year contracts worth several million dollars .

THE OPERATOR LANDSCAPE

Africa’s telecom market is dominated by a handful of pan-African operators, alongside strong national champions in key markets.

Leading Pan-African Operators

National Champions

COST STRUCTURE & PROFITABILITY CHALLENGES

Despite strong revenue growth, African telecom operators face significant cost pressures.

Major Cost Drivers

Profitability Metrics (Indicative)

While operators do not disclose uniform metrics, industry data suggests:

The high margins on mobile money are particularly important. As M-Pesa’s revenue mix shifts toward lending and savings, its margin profile improves further — lending carries minimal incremental cost once the platform is built.

REGULATORY LANDSCAPE

Telecom operators in Africa operate under significant regulatory constraints.

Key Regulatory Factors

The most significant regulatory intervention in recent years has been the tightening of mobile money oversight. Central banks across Africa are applying stricter KYC, transaction limits, and reporting requirements — increasing compliance costs for operators but also legitimising the sector and expanding its addressable market .

FUTURE OUTLOOK

Short-to-Medium Term (1-5 years)

• Data remains the growth engine. Rising smartphone penetration (including affordable Chinese devices) and expanding 4G coverage will drive double-digit data revenue growth for the foreseeable future.

• Mobile money consolidation. The market will likely see a “two-horse race” in most countries — the incumbent operator (MTN or Vodacom/Safaricom) versus a challenger (Airtel or Orange) plus fintech upstarts like Wave. Profitability will come from lending and merchant services, not transfers .

• Enterprise services accelerate. As businesses digitise, demand for managed connectivity, cloud services, and IoT solutions will grow. Operators with strong B2B sales capabilities will benefit.

• 5G remains niche. Outside South Africa and major metros, 5G rollout will be slow. The revenue opportunity is in enterprise (network slicing, private networks), not mass-market consumer .

Long-Term (5-10 years)

Scenario 1: Platform Dominance (Probability: 60%)
Telecom operators successfully transform into digital lifestyle platforms, with mobile money as the anchor. They become the primary access point for financial services, e-commerce, and digital content — similar to the super-app model in Asia. Connectivity becomes a low-margin utility that funds customer acquisition for higher-margin services.

Scenario 2: Disaggregation (Probability: 25%)
Fintechs and OTT providers disaggregate telecom services. Mobile money is provided by independent fintechs (like Wave), connectivity is a wholesale utility, and content comes from global platforms. Operators are reduced to infrastructure providers with lower margins.

Scenario 3: Consolidation (Probability: 15%)
Pan-African operators merge or exit. The market consolidates around 2-3 major players (MTN, Vodacom, perhaps Orange). National champions are acquired. Margins improve due to reduced competition, but innovation slows.

Strategic Risks to Monitor

ASJ CONCLUSION

The African telecom industry has navigated one transition — from voice to data — and is now in the middle of another — from connectivity provider to financial services platform. The numbers are compelling. M-Pesa alone generates over $1.2 billion in annual revenue from 37 million users . Vodacom processed over half a trillion dollars in mobile money transactions in FY2025-26 . Nearly half of M-Pesa’s revenue now comes from lending, savings, and merchant services — not basic transfers .

But the industry is not without challenges. Market saturation means subscriber growth is no longer a reliable revenue driver . Competition from fintechs like Wave is intensifying, particularly on price . Energy costs, foreign exchange volatility, and regulatory burdens continue to pressure margins.

The operators that thrive will be those that complete the transition to platform businesses — using connectivity as a loss leader or low-margin utility to acquire customers for high-margin financial services. They will invest in data analytics to personalise offers (lending limits tailored to usage patterns), expand merchant networks (every transaction generates fees), and partner with banks and insurers to offer products they cannot build themselves.

The phone company is dead. Long live the digital bank with a network tower attached.

FAQ SECTION

1. How do telecom companies in Africa make money?

African telecom operators generate revenue from four primary sources: mobile data services (fastest growing), mobile money and financial services (highest margin), voice and messaging (legacy, declining), and enterprise/wholesale services (B2B growth). Data and mobile money together now account for the majority of revenue growth in most markets .

2. How profitable is mobile money for telecom operators?

Very profitable. M-Pesa generated 161.1 billion Kenyan shillings (~$1.2 billion) in revenue in FY2025 from 37.1 million users . More importantly, 46.4% of M-Pesa’s revenue now comes from lending, savings, and merchant services — products with minimal incremental cost . Mobile money margins are significantly higher than connectivity margins.

3. Which telecom operator has the largest mobile money business?

Vodacom Group, including Safaricom, processed 525.6 billion in mobile money transactions in FY2025–26, making it Africa’s largest mobile money processor by transaction value. MTN Group also processed 525.6 billion in mobile money transactions in FY2025–26, and 500.3 billion in calendar year 2025. In terms of revenue, Safaricom’s M-Pesa leads the market with $1.2 billion annually.

4. Is voice still a significant revenue source for African telcos?

Voice revenue is declining as over-the-top platforms like WhatsApp erode income from calls and SMS. In saturated markets like Nigeria, South Africa, and Kenya, voice now accounts for a much smaller share of service revenue than data or mobile money . However, voice remains essential for low-data users and enterprise applications.

5. How do telecom companies compete with fintechs like Wave?

Fintechs like Wave (which caps transfer fees at 1%) compete aggressively on price. Telcos respond by emphasising their larger agent networks, integrated ecosystem (mobile money + connectivity), and value-added services (lending, savings, insurance). In some markets, telcos have also lowered fees or introduced tiered pricing .

6. What is network slicing and how do telcos make money from it?

Network slicing allows operators to create virtual network segments with guaranteed performance for specific enterprise applications — for example, a dedicated slice for a mining company’s autonomous vehicles. Operators can sell slice-as-a-service, with multi-year contracts worth several million dollars. MTN, Vodacom, Safaricom, and Telkom are developing these solutions for mining, manufacturing, logistics, and energy sectors .

7. How does the E-Levy affect telecom revenue in Ghana?

The Electronic Transfer Levy (1.5% on mobile money transfers above a threshold) reduces transaction volumes as users may revert to cash to avoid the levy. This directly impacts operator revenue from mobile money (both transaction fees and float). Operators have responded by promoting other services (bill payments, merchant payments) that may be exempt or less affected.

8. Why are data margins under pressure despite strong growth?

Intense competition, regulated tariffs, and rising operating costs (inflation, foreign exchange, energy) continue to weigh on margins. Operators also invest heavily in 4G and 5G network rollouts, fibre infrastructure, and spectrum acquisition — all of which increase capital expenditure and pressure near-term profitability .

9. Which African country has the most advanced telecom market?

South Africa has the most mature market, with the highest data usage per capita and the most advanced 5G rollout. Kenya (mobile money leadership), Nigeria (largest population market), and Morocco (competitive, well-regulated) are also advanced in different dimensions.

10. What is the future of mobile money in Africa?

The market will likely see consolidation around 2-3 major platforms per country, with profitability shifting from basic transfers to lending, savings, and merchant services. The entry of lower-cost fintechs like Wave may compress transfer margins, but the overall market is expected to continue growing as financial inclusion deepens .

11. How do telecom operators make money from enterprise services?

Through connectivity services (leased lines, VPNs, SD-WAN), managed services (network management, security), cloud communication (VoIP, SIP trunking, APIs), IoT and M2M solutions (asset tracking, smart metering), and wholesale carrier services (international voice, data roaming, SMS termination). Enterprise contracts typically have longer terms and higher margins than consumer services.

12. How does currency depreciation affect African telecom operators?

Severely. Equipment, handsets, and some services are priced in dollars. When local currencies depreciate, operators face higher costs for network expansion, maintenance, and handset subsidies. Some operators hedge currency exposure or generate USD revenue from international services and wholesale roaming. The impact is most acute in Nigeria, Egypt, and Ghana

Source: Accra Street Journal 

Last Updated on May 23, 2026 by Samuel Kwame Boadu

Samuel Kwame Boadu

Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.

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