The Numbers Are Strong. The Retention Is Not.
Vodacom is South Africa's largest mobile network. Over 40% market share. More than 223 million customers across the group, including Safaricom. Service revenue of R63 billion in FY2025 for South Africa alone, with group revenue climbing 11% year on year to R43.9 billion in Q3 FY2026.
In September 2025, its VodaBucks rewards programme won "Best Telco Loyalty Programme" and "Best Use of Gamification" at the South African Loyalty Awards. For the second year in a row.
In FY2025, its prepaid customer base fell 13.1%. That is 5.7 million people gone. By H1 FY2026, the prepaid base shrank a further 7.4% to 39.2 million. Prepaid revenue in H1 FY2026 declined 1.6% to R13.2 billion. In Q2 alone, prepaid revenue fell 2.9%.
A loyalty programme that wins awards while the customer base shrinks is not solving the problem it was built to solve.
How VodaBucks Works
VodaBucks is available to all Vodacom prepaid, top-up, and contract customers. Users earn VodaBucks by recharging airtime, buying data bundles, paying bills, and completing personalised behavioural goals set by Vodacom. There are also daily free plays called V-Ups, available three times a day on the VodaPay app and once via USSD (*133#).
Earned VodaBucks must be banked before Friday midnight each week. The earning cycle runs Saturday to Friday. If you forget to bank, you lose them. Once banked, VodaBucks are valid for 12 months.
Banked VodaBucks can be spent in the VodaStore on groceries, fashion, electronics, and travel. They can be converted to cash in the VodaPay wallet. They can be withdrawn at Pick n Pay, Boxer, KAZANG, and OTT agents. And they can be shared with other VodaBucks members.
| Mechanic | How It Works | Channel |
|---|---|---|
| Earning | Recharge, buy bundles, pay bills, complete behavioural goals | VodaPay app, USSD *133# |
| V-Ups (daily plays) | 3 free plays per day on the app, 1 via USSD. Win VodaBucks or prizes | VodaPay app, USSD |
| Banking | Must bank earned VodaBucks before Friday midnight each week | VodaPay app, USSD |
| VodaStore | Spend VodaBucks plus cash on fashion, groceries, tech, travel, vouchers | VodaPay app |
| Cash conversion | Convert banked VodaBucks to cash in VodaPay wallet | VodaPay app |
| Cash withdrawal | Withdraw via Pick n Pay, Boxer, KAZANG, OTT agents, Cash Express ATMs | Physical agents |
| Sharing | Share VodaBucks with other VodaBucks members | VodaPay app |
| Expiry | 12 months after banking. Unbanked VodaBucks lost weekly | N/A |
The Numbers That Matter
| Metric | FY2025 | H1 FY2026 |
|---|---|---|
| SA prepaid customers | ~39M (down 13.1% from 44.85M) | 39.2M (down 7.4% YoY) |
| SA prepaid revenue | R27.3B (+3.5%) | R13.2B (-1.6%) |
| Prepaid ARPU | R55 (+12.2%) | R57 (+3.6% in Q2) |
| SA service revenue | R63B (+2.3%) | R31.7B (+2.2%) |
| VodaBucks active monthly users | 27M reached in Year 1 (2021) | 14M+ (Sep 2025) |
| Group revenue Q3 FY2026 | — | R43.9B (+11% YoY) |
| Group operating profit H1 FY2026 | — | R20.2B (+25.5%) |
| Financial services customers (group) | — | ~100M |
| Smart devices on network | 32.3M (+1.5%) | 34.3M (+7.8%) |
What Works
Give credit where it is due. The VodaBucks programme does several things well.
It links rewards to specific behaviours. Buying a bundle, paying a bill, completing a goal. That is better than a generic "spend and earn" loop. The gamification layer, V-Ups and Achiever goals, drives daily engagement. The VodaStore gives redemption utility across real categories: food, fashion, electronics, travel. And the ability to convert VodaBucks to cash via VodaPay removes the friction that kills most loyalty currencies.
In its first year, the programme reached 27 million customers. By September 2025, it had over 14 million monthly active users. Two back-to-back SA Loyalty Awards. An R500 million summer campaign with daily prizes. These are not small numbers.
What Does Not Work
The programme is built for engagement. Not retention.
VodaBucks rewards customers for things they are already doing: recharging, buying bundles, paying bills. It does not change the behaviour that causes churn. The 5.7 million customers who left in FY2025 did not leave because they forgot to play V-Ups. They left because a competitor offered a cheaper bundle, or they could not afford to recharge, or they had a second SIM they preferred.
The weekly banking requirement creates unnecessary friction. Forget to bank by Friday midnight and you lose everything you earned that week. That does not build loyalty. It builds frustration. Customer reviews on HelloPeter and social media confirm this: fulfilment problems in the VodaStore, disappeared VodaBucks, orders cancelled with no explanation. Scam calls impersonating VodaBucks have become so common that Vodacom has issued multiple public warnings.
The core problem is coverage, not engagement. 14 million active VodaBucks users out of 39 million prepaid customers means roughly 36% of the prepaid base engages monthly. The other 64% either does not know about the programme, does not care, or finds it too complex. Meanwhile, the overall base keeps shrinking. A loyalty programme that only activates a third of customers while the base declines by millions is a retention tool with a retention gap.
The Summer Campaign Question
Vodacom's 2025 Extra Your Summer campaign promised R500 million in prizes and rewards, including eight R1 million cash prizes, R50,000 in VodaBucks for 100 winners, a year's worth of fuel or data, and daily Coca-Cola giveaways. The hero offer was 20GB of data for R99 on VodaPay.
Sound familiar? This is the same lucky-draw-plus-mega-deal structure used by every telco in Africa. The same one MTN Nigeria uses with its Mega Billion Promo. The structure that creates a short spike in recharges, awards a handful of big winners, and gives the other 39 million customers nothing meaningful.
The R99 for 20GB deal is a good affordability play. But it is a price promotion, not a loyalty mechanic. It does not differentiate Vodacom from MTN, Telkom, or Cell C when they run their own data deals the following month.
The H1 FY2026 Picture
South Africa's prepaid segment is under structural pressure. Consumers are financially squeezed. Competition from MTN, Telkom, and Cell C is intensifying. Vodacom acknowledges this directly: CEO Shameel Joosub told Reuters in November 2025, "You've got a consumer that's more under pressure, but you've also got a lot more competitive competition in the prepaid segment."
The response so far has been bigger data deals, more competitive device offers, and VodaBucks as the engagement layer. But the international operations tell a different story. Egypt delivered 43% revenue growth. Financial services across the group, including M-Pesa through Safaricom, now connect around 100 million customers and process US$500 billion in annual transactions. Vodacom Business grew cloud, hosting, and security revenue by 27.1%.
The growth engine is not prepaid recharges. It is financial services, data, and digital products. The loyalty programme should reflect that.
The Comparison That Matters
Dis-Chem retired a 23-year loyalty programme and replaced it with instant, guaranteed, supplier-funded discounts. In 17 weeks: R410 million returned to customers, 550,000 net-new shoppers, 13.7% pharmacy revenue growth. No lucky draws. No weekly banking deadlines. No VodaStore fulfilment headaches.
Shoprite Xtra Savings has 33.7 million members generating 88% of turnover. Instant savings at the till. No points to bank, no currency to convert, no expiry traps.
VodaBucks has strong mechanics in places, but the architecture is built around complexity. Earn, bank, convert, spend, withdraw, or share. Six steps between action and value. In a mass-market prepaid segment where the average customer spends R55 a month, simplicity wins.
What a telco loyalty programme should do. It should make switching expensive, not by locking customers in, but by making staying obviously better. Instant value on every recharge. Automatic data bonuses that grow with tenure. Lifestyle rewards funded by partners, not by the telco's own margin. Delivery through channels customers already use: WhatsApp, USSD, mobile money. No weekly banking deadlines. No six-step redemption journeys. Immediate, guaranteed, relevant.
Three Questions Worth Sitting With
What percentage of your prepaid base actively engages with your rewards programme every month, and what is the churn rate for engaged versus non-engaged customers? If you cannot answer this, your programme is reporting activity, not impact. The 36% engagement rate at Vodacom means nearly two-thirds of the prepaid base is untouched by VodaBucks. If churn is the same for engaged and non-engaged customers, the programme is not doing its job. If churn is lower for engaged customers but you are not actively converting the non-engaged group, you are leaving the biggest retention opportunity on the table.
How many steps does it take for a customer to go from earning a reward to receiving tangible value, and can that journey be completed without downloading an app? VodaBucks requires earning, banking weekly, then spending or converting. That is at minimum three steps, and banking has a weekly deadline with penalties for missing it. In a prepaid market where many customers do not have consistent smartphone access, USSD reach matters more than app features. Count the steps. Cut the steps. Every step you remove increases the percentage of customers who actually feel the value.
If you removed the lucky-draw prizes and gamification from your programme tomorrow, would customers still find enough value to stay? The R500 million summer campaign is exciting. The daily V-Ups are engaging. But engagement is not the same as retention. Strip the gamification away and ask what remains. If the answer is a complicated points currency with weekly expiry and a store that sometimes cancels orders, the foundation needs work. The programmes that retain customers long-term are the ones that deliver consistent, tangible, no-friction value on every transaction. Not once if you are lucky. Every single time.