In a significant move towards modernizing its telecommunications infrastructure, South Africa plans to phase out the type approval and activation of 2G and 3G-only devices by September and December 2024, respectively. This policy shift, aimed at encouraging the adoption of more advanced technologies, poses challenges for local retailers and consumers heavily reliant on older network devices.
Retailers such as Ackermans and PEP, known for their extensive range of 2G and 3G-only devices, will be directly impacted by this change. Mobile operators like Vodacom and MTN also face the task of transitioning millions of users who currently depend on these legacy networks.
In response to these impending changes, MTN South Africa has announced plans to subsidize entry-level 4G smartphones, making them more accessible to customers who currently use 2G or 3G-only devices. This initiative is part of MTN's broader strategy to ensure a smooth transition for its users.
“2G and 3G devices still play a vital role at MTN,” the company stated. “We have put measures in place to serve customers who have been utilizing 2G devices. Some of the measures include increasing investment towards smart feature devices and continuing to invest in subsidizing 4G entry devices to reduce costs so that our customers can afford to purchase these devices.”
MTN revealed that over 30% of its prepaid device sales are currently 2G phones, though it has already stopped distributing 3G-only devices. The operator's commitment to subsidizing 4G smartphones highlights its proactive approach to addressing the market's needs during this transition.
Vodacom, another major player in South Africa’s telecommunications market, echoed similar concerns about the ban's impact. A Vodacom spokesperson emphasized the substantial market share still held by 2G and 3G terminal sales, driven by consumer demand. The spokesperson highlighted the economic challenges and high taxation on 4G and 5G smartphones as significant barriers to broader adoption of newer technologies.
“Transitions of this nature have a significant impact on customers, and we are hopeful that Icasa will work with the industry to develop a practical schedule for sunsetting legacy technologies during its feasibility study, which we expect to commence shortly,” said the Vodacom spokesperson.
Vodacom recommended that the government engage with the industry to manage the inflow of new 2G/3G devices into the market and monitor the attrition rate of existing devices before implementing further measures.
Telkom and Pepkor, the owner of Ackermans and PEP, had not responded to inquiries by the time of publication.
This regulatory shift follows the publication of the Next-Generation Radio Frequency Spectrum policy by South Africa’s Department of Communications and Digital Technologies (DCDT) on May 28, 2024. The policy outlines the preliminary shutdown dates for the country’s 2G and 3G networks, marking a decisive step towards a more modern and efficient telecommunications landscape.
As the industry braces for this significant transition, MTN's initiative to subsidize 4G smartphones is expected to play a crucial role in mitigating the impact on consumers, particularly those in economically challenging circumstances. The coming months will be pivotal as operators, retailers, and the government navigate the complexities of this technological shift.
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