MTN MoMo South Africa has launched a smartphone financing scheme that effectively mirrors a rent-to-own model. The initiative, targeting low-income prepaid users, aims to boost 4G smartphone adoption ahead of the country’s planned shutdown of its 2G and 3G networks in 2027.
A Strategy to Drive Digital Inclusion
The programme enables selected customers to access entry-level 4G smartphones by paying well below the market price. MTN covers the bulk of the device cost and ties usage to its MoMo (mobile money) platform and network services. This approach is intended to help more South Africans transition to modern digital connectivity without incurring unaffordable expenses.
Initially launched in Gauteng, the service distributed 5,000 devices in its first phase. MTN plans to reach 1.1 million customers nationwide through additional rollout phases ending in 2026.
How It Works
Customers selected for the offer receive an entry-level 4G phone (such as the Itel AC51) that is SIM-locked to the MTN network. While the company does not describe the model as rent-to-own, the structure functions similarly:
- A small upfront payment is made by the user.
- Continued access to the phone is contingent on regular top-ups or MoMo usage.
- MTN absorbs additional costs, estimated at over R150 per device.
This design incentivises ongoing engagement with MTN’s ecosystem and limits churn by anchoring customers to the network through the device.
Strategic Goals
MTN is positioning the initiative as both a commercial and social investment. By facilitating access to smartphones, the company expects to accelerate digital financial inclusion, drive adoption of mobile services, and grow mobile data usage on its 4G infrastructure.
The programme is being implemented in partnership with “Smartphone For All”, a social enterprise led by former Metrofile Nigeria CEO Babatunde Osho. The broader goal is to address the digital divide, especially in underserved communities, before the full decommissioning of legacy mobile networks.
Competitive Landscape
MTN’s move mirrors similar strategies from competitors. Vodacom, for example, offers a monthly instalment model through its Easy2Own service, requiring a deposit and an 11-month commitment. However, MTN’s offer stands out by lowering the initial entry barrier to below R100 and integrating it with MoMo.
Considerations and Risks
While the offering opens up digital access for millions, it also raises questions:
- Devices are network-locked, potentially limiting user flexibility.
- Users may lose access to the device if payment terms are not met.
- Transparency and consumer education will be critical to prevent misunderstandings about ownership rights or hidden costs.
MTN has not detailed whether customers will gain full device ownership after a fixed term or repayment milestone.
What Lies Ahead
MTN’s rent-to-own style smartphone service under the MoMo brand is an ambitious attempt to link connectivity with financial inclusion. As rollout expands across South Africa, the success of the programme will depend on consumer understanding, sustained usage, and long-term affordability.
The initiative signals a growing trend among telecoms to create hybrid models that bridge infrastructure access and digital service delivery, especially in emerging markets where cost remains a major barrier to smartphone adoption.
