Vodacom’s environmental, social, and governance (ESG) report shows that smartphone penetration on its South African network is lower than in Lesotho and Egypt.
The company released its ESG and integrated annual reports earlier in June. It showed that the number of smartphones as a percentage of Vodacom SA’s subscriber base decreased from 64.5% to 61.7% during the past year.
Meanwhile, smartphone penetration in Lesotho increased from 66.3% to 72.5%. Egypt’s smartphone penetration increased from 67.9% to 74.3%.
Asked for comment, Vodacom explained that smartphone users did not grow as quickly as new subscribers in South Africa.
“Some of the new subscribers to our network use SIMs for data modems, laptops, smartwatches or voice services rather than smartphones,” a Vodacom spokesperson told MyBroadband.
Vodacom also explained that Lesotho’s figures were impacted by legislative changes in the country.
“In Lesotho, subscribers declined in the year as a result of new subscriber registration laws. From a numbers perspective, this means that a lower denominator supported higher penetration of smartphones,” said Vodacom.
“One of the reasons smartphone penetration is lower in South Africa compared to a market like Lesotho is the extent of other smart devices on the network, such as modems, laptops, and smart watches,” the company said.
Smart devices on the Vodacom SA network totalled 31.8 million by 31 March 2024. If that figure were used, smart device penetration would increase to 77%.
In addition to smartphone penetration, Vodacom’s data showed that the number of smartphones on its network in South Africa increased from 23.5 million to 25.4 million.
It should be noted that Vodacom made a mistake in the ESG addendum containing the data. The document on its website showed that Vodacom’s smartphone numbers for the 2023 financial year were 29.3 million.
Vodacom explained this was the number of smart devices rather than just smartphones. It said the figure should’ve been 23.5 million.
This means MTN SA has had more smartphones on its network than Vodacom since at least December 2022, despite Vodacom having substantially more subscribers.
MTN’s annual report its the 2022 financial year showed that, as of 31 December 2022, it had over 25.6 million smartphones on its network.
This figure increased to 27.5 million smartphones during its previous financial year.
South Africa’s two largest mobile operators released details about the number of smartphones on their networks as part of their reporting on how they are closing the digital divide in Africa.
The digital divide refers to the gap between people with and without access to computers, smartphones, and the Internet.
“Internet access is transformational and empowers people to contribute to society and connect meaningfully,” Vodacom stated in its ESG report.
“Connectivity is the foundation of inclusion, empowerment and opportunity.”
Vodacom cited two studies to substantiate its statements — a 2017 World Bank report and a 2019 study by the International Telecommunications Union (ITU).
According to the World Bank, enhanced connectivity has macro and microeconomic benefits, including reducing poverty and increasing welfare for underserved populations.
The ITU report found that expanding mobile broadband penetration across Africa by 10% could boost gross domestic product per capita by 2.5%.
“Device ownership is key to unlocking the potential of advanced connectivity,” Vodacom stated.
“However, affordability remains a stumbling block to Internet access and use in Africa.”
Vodacom said most people who don’t use mobile Internet live in areas covered by mobile broadband. Sub-Saharan Africa remains the region with the largest coverage usage gaps.
To tackle this challenge, Vodacom said it offers affordable entry-level smartphones and financial solutions to broaden device ownership.
“We run programmes aimed at reducing the cost of smartphones,” Vodacom stated.
“We reduced the cost of our 4G devices by applying subsidies, discounts and offers tailored to low-income communities.”
One example is the Nokia 215 4G and Nokia 105 4G, which Vodacom said sell for R279 each.
Vodacom said it also offers financing for customers to shift from 2G to 4G handsets.
Besides offering a better experience than 2G and 3G devices, South Africa has embarked on a project to switch off its legacy networks to focus scarce radio frequency spectrum resources on 4G, 5G, and next-generation technologies.
The Department of Communications and Digital Technologies (DCDT) recently published its Next-Generation Radio Frequency Spectrum Policy, which aims to ban the importation and sale of 2G and 3G devices by year-end.
First, it wants type approvals on all new 2G and 3G devices halted by 30 September 2024.
This means the Independent Communications Authority of South Africa will no longer approve new 2G and 3G-only devices, effectively blocking them from being sold locally.
Devices already type-approved in South Africa may still be imported and sold.
After blocking type approvals, the DCDT wants to ban networks from activating any new 2G and 3G devices on their networks on 31 December 2024.
The Department of Communications and Digital Technologies (DCDT) wants operators to start shutting down their legacy networks from 1 June 2025, although the switch-off dates have yet to be finalised.
By 31 December 2027, it wants 2G and 3G completely decommissioned in South Africa.
MTN has confirmed that it aims to switch off its 3G network by 31 December 2026. It has not given a date for shutting down its 2G network.
Both Vodacom and MTN have expressed concern about the DCDT placing all networks on arbitrary switch-off deadlines for their legacy networks.
“Vodacom has advocated for an industry-led timeline in response to the challenge of migrating users from legacy (2G/3G terminals) to more digitally enabled 4G/5G devices,” it said.
It said it was already gradually migrating from legacy 2G and 3G technologies to modern 4G and 5G.
Vodacom estimated that several million 2G and 3G devices remain active on South Africa’s networks, as well as a few million machine-to-machine devices.
It said it hoped the DCDT and other stakeholders would consider industry submissions regarding the switch-off deadlines.
However, Vodacom said it supported the government’s more stringent control of imports and type approval of 2G and 3G-only devices.
“Government plays a key role in guiding this transition. The first step in the process involves managing the inflow of 2G and 3G devices into the country,” it stated.