Vodacom South Africa Offers Smartphone Financing for Prepaid Customers

Vodacom South Africa has launched an offer that will enable prepaid customers to purchase smartphones on a 12-month payment plan with zero interest. To make it available, the operator will communicate directly with customers whose eligibility will be determined based on their current prepaid airtime, data spend and length of time on the Vodacom network. Eligible customers who choose the option will pay a 10 percent deposit on the device, and Vodacom will deliver the handset to them in two or three working days. This payment plan will initially be available on a range of 4G/LTE Samsung phones including the Galaxy J4, A1, and A2, with the lower-end device priced at ZAR 799.00 (US $54.80) and the higher end device ZAR 2,999.00 (US $205.68) over 12 months. The company expects that this offer will be extended to other devices in the future.  As operators expand their networks and available services, one of the obstacles to uptake and traffic maximization, especially in developing markets, is lack of compatible devices due to high prices. Some users may not have devices at all, while others may have basic phones without data. So getting 4G/LTE devices into the hands of as many customers as possible is key for any operator. That could be accomplished with device subsidies or, as in this case with Vodacom, by allowing customers to spread the payments over a period of time, without interest or fees. Payment plans are typically allowed for postpaid plans, since the customers are generally signed on for long-term contracts. However, Vodacom is taking the somewhat unusual step of allowing monthly payments for prepaid users. That is justified in light of the fact that prepaid users are more inclined to be budget-oriented and to find smartphones more difficult to afford. Vodacom has stated that it wants to drive digital and financial inclusion by giving their customers the opportunity to purchase 4G-enabled smartphones, and this offer should go a long way toward fulfilling that goal. Expanding the offer to include a wider range of devices from different manufacturers will make it even more appealing over time.

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