MTN South Africa has begun distributing ultra-low-cost 4G smartphones, priced at just $5, to prepaid users in an ambitious campaign to phase out legacy 2G and 3G networks and bring millions of customers into the digital era.
MTN CEO Charles Molapisi told TechCentral on Wednesday that the first phase of the project has already begun, with 1,700 devices handed out in Soweto, southwest of Johannesburg. The initiative targets 1.2 million prepaid customers, particularly long-time users who remain on older networks due to the high cost of smartphones.
The rollout will expand to other underserved communities, including townships around Pretoria, KwaZulu-Natal, and the Eastern Cape, with the goal of distributing one million smartphones within 18 months.
“On the MTN network today, we have about 85% smartphone penetration. That means some 5 to 6 million customers still do not own smartphones,” said Molapisi. “When you look closely, 60–70% of them are loyal, long-term customers—people who have been with us for 10 to 15 years. They simply can’t afford smartphones.”
Globally, countries are pushing operators to sunset ageing 2G and 3G technologies. In South Africa, a government directive has set December 2027 as the deadline for full shutdown. However, industry leaders argue that the transition should be driven by market readiness rather than a hard deadline, pointing out that device affordability remains the greatest hurdle.
“You can’t migrate customers if they’re still using outdated technology—and you certainly can’t leave them behind,” Molapisi emphasised. “So we need new funding models to drive digital inclusion.”
The $5 smartphones are being provided through a partnership with Smartphone for All, which supplies the devices to MTN at no cost. The $5 charge acts as an insurance deposit. MTN and Smartphone for All share future revenues generated from increased data usage once customers upgrade from basic feature phones.
The pilot model being distributed is an entry-level Itel phone, typically sold at $38 (R740), featuring:
- A 5.5-inch FWVGA display
- 32GB ROM and 4GB RAM
- Dual SIM support
- 2MP and 4MP cameras
- Android 14 Go Edition
As the rollout expands, other affordable models will be introduced to provide more variety.
MTN’s initiative aligns with efforts by the South African government to reduce smartphone costs. In March, the Treasury scrapped the 9% excise duty on smartphones priced below $130 (R2,500), a move welcomed by operators as a step toward improving affordability.
Despite progress, challenges remain. Molapisi noted that the sequence of network decommissioning will be critical. MTN plans to phase out 3G first, followed by a downsized 2G layer retained for machine-to-machine (M2M) devices.
“There are still many M2M applications relying on 2G, so we’ll keep a thin 2G layer for those. The rest of the spectrum can then be reallocated to 4G and 5G,” he said.
Beyond the technical benefits, the social impact of the initiative has been palpable.
“We had an elderly customer tell us she’s been with MTN for 12 years and now owns her first smartphone,” Molapisi recounted. “Thanks to that device, her grandchildren can watch educational content on YouTube. That’s why we’re doing this—to bring as many people as possible into the digital age.”
