Capitec Connect was launched in September 2022 and now boasts 1.25 million active SIMs with an average revenue per user of R77.
This was revealed by Capitec Bank CEO Gerrie Fourie following the company’s results for the six months ended 31 August 2023.
At the end of August 2023, more than 1.3 million Capitec Connect SIM cards had been issued. Fourie revealed that 1.25 million of these SIMs are active subscribers.
Fourie told BusinessTech they are signing up around 120,000 new Capitec Connect subscribers per month.
The latest data shows that Capitec Connect generates R96 million monthly mobile revenue, equating to over R1 billion per year.
This is the fastest subscriber growth ever in the South African telecommunications market, illustrating Capitec’s incredible reach.
Capitec Bank has over 20 million clients, making it easy for the company to scale with new products like mobile services.
The bank already covers 10 million people with its insurance products. It reached 2.2 million active funeral policies in five years.
Capitec wants to do the same in the mobile telecommunications market by signing up millions of clients and disrupting the telecommunications market.
“For me, it’s not about the money. It’s about being different in the telecoms space – and about data. Data for us is the long-term play. We understand our clients a bit better, we can offer value,” Fourie said.
He told Daily Investor that Capitec Connect is “more of a data-play and a value-added play than a profit-play”.
Flagship Asset Management equity analyst Philip Short said Fourie told them Capitec Connect could easily sign up 10 to 12 million subscribers.
Should this be the case, Capitec Connect would be the same size as Cell C and become one of South Africa’s largest mobile operators.
However, it will be easier said than done. Vodacom and MTN are formidable competitors and will react to any threat to their revenue.
Capitec Connect’s biggest value proposition is affordable prepaid data. It offers 1 GB at R45 and 10 GB at R199.
It is also planning additional products based on client needs, improved client retention, and better behavioural data.
Whether it will be enough to continue the exceptional growth remains to be seen, especially in the exceptionally competitive mobile market.
Should Capitec Connect’s rapid growth continue, Vodacom, MTN, and Telkom will react with more attractive offerings.