Good afternoon. Nigeria's telcos discovered that calling airtime loans "value-added services" doesn't make consumer protection rules disappear.

And in a plot twist nobody saw coming, Absa (the last holdout among South Africa's big four banks) is finally joining the mobile network party. Fashionably late, but we're glad they showed up.

On to today's edition.

Absa joins the MVNO party (fashionably late)

What's happening: Absa confirmed it's launching a mobile network, making it the last of South Africa's big four banks to enter telecoms. Managing executive Nick Nkosi admitted during the MyBroadband Tech Summit they're "late to the party" but claims they're being intentional about getting the value proposition right.

Why it matters: Absa's delay is strategic inertia dressed up as prudence. FNB, Nedbank, and Standard Bank already run networks with hundreds of thousands of subscribers, whilst Capitec boasts over 1.1 million customers on Capitec Connect. That's proper network effects at scale, not just theoretical customer value propositions.

State of play: Capitec's first-mover advantage let it lock in over a million customers before competitors figured out go-to-market strategies. FNB followed with FNB Connect, claiming 1 million users. Nedbank and Standard Bank lag behind with smaller but growing bases. Nedbank's figures are undisclosed.

Zoom in: Absa enters a market where customers already compare four banking MVNOs, not zero. Technical infrastructure is table stakes — any bank can white-label an MVNO with Cell C, Vodacom, or MTN. Differentiation comes down to pricing, data rollover policies, and banking integration. Absa needs more than "we waited longer so it's better" to convince customers to port numbers.

So what: Banking MVNOs bet that customer stickiness compounds across products. The more embedded the customer, the more retained. Every additional service raises switching costs. Absa's delay means it enters after competitors locked in early adopters. The question isn't whether Absa can launch (obviously it can), but whether late-mover disadvantage is actually worth the polish.

Nigerian banks will now verify fraud-linked mobile numbers under new CBN–NCC agreement

What's happening: Nigeria's Central Bank and the Nigerian Communications Commission signed a formal agreement that gives banks real-time access to telecom data. At the centre of the MoU is a data-sharing system called the Telecom Identity Risk Management System (TIRMS), which allows financial institutions to check whether a mobile number linked to a transaction has been recently swapped, recycled, flagged for suspicious activity, or gone inactive, before a payment clears.

Why it matters: Mobile numbers increasingly underpin identity, authentication, and financial access in Nigeria. Many fraud incidents involve SIM swaps and compromised phone numbers used to hijack accounts and bypass authentication. Until now, banks have had no reliable way to verify the status of a mobile identity in real time. This closes one of the most exploited gaps in Nigeria's digital payments system.

State of play: Financial fraud in Nigeria has evolved into a high-stakes arms race. While banks are deploying more sophisticated tools, reported losses jumped from ₦17.67 billion ($12.80 million) in 2023 to ₦52.26 billion ($37.86 million) in 2024 before dropping 51% to ₦25.85 billion ($18.7 million) in 2025. Many of these fraud schemes exploit weaknesses in telecom infrastructure, particularly SIM swaps, recycled numbers, and compromised mobile identities.

Zoom in: The MoU creates two joint committees: one focused on payment systems and consumer protection, and another on telecom identity risk management. These groups will oversee coordination, resolve operational issues, and track progress. This is not the first collaboration between the regulators — their joint intervention in June 2025 helped resolve the long-running USSD debt dispute between banks and telecom operators.

So what: The move addresses the identity layer in Nigeria's financial fraud problem. Mobile numbers are the linchpin of digital banking authentication in Africa. This framework could become a template for other African markets where telecom and banking infrastructure are deeply intertwined but rarely coordinated. If successful, expect Kenya, Ghana, and South Africa to follow with similar cross-sector data-sharing agreements.

MTN, Airtel suspend airtime lending after regulator calls bluff

What's happening: MTN and Airtel pulled airtime lending services across Nigeria after the FCCPC classified them as credit offerings requiring full digital lending compliance. Both telcos claimed "voluntary suspensions" pending regulatory clarity, which is essentially corporate speak for "let's try this again".

Why it matters: Calling airtime loans "value-added services" worked well until Nigeria's consumer watchdog read the product terms and decided lending money (even if repaid in airtime) is still lending. The FCCPC's enforcement proves regulatory arbitrage has an expiry date, and that date just passed.

State of play: Airtime lending thrived in regulatory grey space for years. MTN's XtraCash and Airtel's SmartAdvance let subscribers borrow airtime when accounts hit zero, with automatic deductions from future top-ups plus interest. Millions used these services monthly, making them material revenue streams. Loans were small (₦100–₦5,000 / $0.07–$3.62), short-term (7 to 30 days), with interest rates that would make payday lenders blush.

Zoom in: The FCCPC's position is that credit is credit regardless of form. If customers receive value now and repay later with interest, that's a loan. The commission pointed to exploitative practices — automatic renewals, opaque interest calculations, aggressive collection tactics — as justification for intervention. Telcos argued these are convenience features, not financial products, but unfortunately that collapsed when regulators examined actual terms.

So what: This isn't just about airtime. It signals regulators across Africa are closing loopholes that let non-bank entities operate lending businesses without oversight. If you extend credit, you're a lender. If you're a lender, you follow lending rules. Nigeria's enforcement will embolden consumer protection agencies in Kenya, Ghana, and South Africa to scrutinise similar products.

M-KOPA

M-KOPA, the Kenyan asset financing startup, has extended more than ZAR 370 million ($22.5 million) in credit to low-income consumers in South Africa since its 2023 launch. The fintech finances smartphones through flexible payment plans, targeting "everyday earners" who are priced out of traditional banking.

How it works: M-KOPA assesses creditworthiness based on alternative data, not traditional credit histories. These customers are largely urban (77%) and earn an average of ZAR 185 ($11.25) per day. The company sizes credit facilities to match income volatility, with repayments structured around daily earning patterns instead of monthly salary cycles.

Global scale: Founded in 2010, M-KOPA has now served more than 7 million customers across Kenya, Uganda, Ghana, Nigeria, and South Africa, extending over $2.5 billion in credit. In Nigeria alone, the company lent ₦231 billion ($170.34 million). The South African operation contributed ZAR 24 million ($1.45 million) in taxes and ZAR 155.5 million ($9.46 million) in local procurement in 2024, while employing 155 people, 55% of them women.

Capitec launched Capitec Connect and now leads the South African banking MVNO market with more than 1.1 million active customers as of August 2025, making it the most successful banking-sector mobile network in the country. The bank beat FNB, Standard Bank, and eventually Nedbank to market, proving that being first to launch with a compelling value proposition beats waiting for the "perfect" product.

Absa's Nick Nkosi acknowledged they're "late to the party" but insists they've been intentional about getting the customer value proposition right before launching. Whether that strategy pays off better than Capitec's first-mover advantage remains to be seen, but the subscriber numbers don't lie.