MTN says the smartphone market in South Africa is "premiumising," in part due to people renting rather than buying smartphones.
MTN said South Africans were increasingly buying more expensive smartphones, reflecting a marked shift from previous years, where the vast majority of sales occurred in the budget segment.
Market research firm Omdia recently reported a 17% increase in smartphone sales in South Africa during the second quarter of 2026.
The improvement bucked a broader trend across the continent, where sales shrank due to rising device costs, driven in large part by surging memory prices.
The prices of DDR and NAND flash memory have surged due to demand for artificial intelligence (AI) processing power.
These components account for a higher proportional cost in budget devices, resulting in a greater percentage-based increase in price than on mid-range and premium devices.
Manufacturers also have more room to downgrade RAM on higher-end phones, whereas many budget devices have the bare minimum needed to be functional.
Omdia said South African consumers had strong purchasing power and that more consumers were buying devices priced above the entry-level segment.
MyBroadband asked South African mobile network operators whether their observations in smartphone sales correlated with Omdia’s research.
MTN said the broader market trend points to growing demand for mid-tier and premium 4G and 5G smartphones, which aligns with what we are seeing across our device portfolio.
“The market is premiumising, with customers increasingly migrating to higher-value devices such as the Samsung A-series, Honor and other mid-tier 5G smartphones.”
MTN also said that financing initiatives such as Pep’s FoneYam continued to improve smartphone affordability and accessibility.
The mobile network said the smartphone rental service was helping more customers access capable 4G and 5G devices and participate in the digital economy.
Pep launched FoneYam in early 2024 and had signed up 2.4 million customers to the service within two years. By March 2026, its rental book stood at R2.6 billion.
Instead of buying a phone on prepaid or contract, FoneYam customers sign up for a 12-month phone rental agreement.
Customers can choose from devices valued between R1,300 and R7,000, with monthly rental fees ranging from R125 to R748.
To reduce the risk of customers defaulting on payments, FoneYam incorporates software like Samsung’s Knox that can temporarily lock the device’s core features, including calling and online connectivity.
The service has helped Pep enter the market for higher-end devices, where it previously focused primarily on budget offerings with lower margins.
Slant Research previously found that the total cost of a FoneYam rental contract was substantially higher than what a customer would pay if they bought the device.
They also don’t get to keep the phone after the agreement, unless they pay a settlement fee. The upside is that customers do not have to undergo credit checks or confirm sources of income.
FoneYam is just one of several smartphone rental services that have emerged in recent years, with other examples including PayJoy, Pay It Off, and HiFlex.
MTN also offers a rent-to-own AirVantage smartphone service through its MoMo app. Customers can choose to pay instalments on devices over 3, 6, 9, or 12 months.
At the end of their term, they can choose to make a final payment to own the device or hand it back to MTN.
Cell C also told MyBroadband its smartphone sales remained resilient in the second quarter of 2026, despite the higher device costs.
It also attributed the growth to expanded device financing and pay-over-time options, which made devices more accessible by lowering upfront costs and were a major factor in its sales performance.
