Affordable phones, massive reach: how Pepkor dominates South Africa’s prepaid market 📱

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South African retail group Pepkor is tightening its grip on the country’s prepaid mobile market. According to its latest half-year financial results, released on May 27, 2025, the company now sells 8 out of every 10 prepaid phones in South Africa—up from 7 out of 10 the year before. That dominance coincides with a 17% year-over-year increase in mobile device sales during the six-month period ending in March.

Reaching low-income households with affordable devices 💸

Pepkor operates nearly 6,000 stores across South Africa, most of which serve low-income households—an audience that makes up around 63.5% of the population, or roughly 34.3 million people. This wide retail footprint allows Pepkor to distribute prepaid phones at scale, resulting in 6.8 million units sold in just six months.

Smartphones now account for 65% of device sales, up from 60% in the previous period, thanks to more accessible price points. To keep the momentum going, the company plans to open between 250 and 300 new stores by the end of the year.

FoneYam’s rental model gains traction 📲

One of Pepkor’s most promising initiatives is FoneYam, a phone rental service launched in 2024. The program offers customers an affordable way to access smartphones through low-cost monthly payments. By the end of March 2025, FoneYam had 1.5 million active users, with an average of 165,000 new sign-ups each month—up from 120,000 previously.

Strong growth backed by fintech bets 💼

On a group level, Pepkor reported a 12.8% increase in revenue, hitting 48.8 billion South African rand (approximately $2.73 billion). Net profit for the half-year rose by 12.4%.

The fintech division stood out with the fastest growth, surging 34.5%, fueled by a 67.3% jump in financial services revenue. This highlights Pepkor’s strategy to combine low-cost consumer goods with digital services tailored to the needs of South Africa’s underserved communities.

What do you think?
Could this mix of prepaid devices and affordable digital services work in other African countries too? Let us know your take.