Vodacom and MTN have given MyBroadband contradictory explanations for why phone contracts now cost considerably more than buying the handset for cash.

Vodacom points to the unintended consequences of regulatory changes strengthening consumer protection. MTN says packages simply carry more data, voice and SMS than they did ten years ago.

The finding they were responding to is stark: a decade ago a contract was marginally cheaper than cash, and today it is roughly a third more expensive.

Neither explanation fits the numbers cleanly. When the iPhone 6s launched in 2015, Vodacom's cheapest 24-month contract totalled R13,176 against a cash price of R13,299, making the contract 1% cheaper. For the iPhone 17, contracts run 31% to 36% above prepaid.

Across that decade, retail prices rose 56% to 76%, while contract prices rose 106% to 114%, meaning the financing side grew at roughly double the rate of the hardware. Vodacom's 48-month option stretches it further, at about R28,800 for a phone Digicape sells for R19,999, a premium of R8,801. Samsung's flagships follow the same curve.

Vodacom says default risk is not priced into individual contracts and is managed through credit vetting instead, though MTN and Samsung can now remotely restrict handsets when customers stop paying.

MyBroadband reported both operators' responses and noted Vodacom declined to elaborate on how the composition of postpaid propositions had actually changed. Its original analysis set out the iPhone 6s and iPhone 17 comparison that prompted the questions. A separate piece documented the 48-month Vodacom contract, which the operator says exists to make high-end devices affordable in a tough economy.

Neither answer explains the gap. If the extra cost were bundled data and minutes, prepaid data prices have been broadly flat for three years, so the added value does not amount to double the rate of handset inflation.

If it were regulation, that is an argument that protecting customers from early termination penalties is being recovered from everyone who stays. What actually happened is that device financing turned into a lending business with the interest folded into a monthly bundle where nobody can see it.

For a business kitting out a team, the arithmetic is simple. Buy the handsets cash, run SIM-only, and treat any contract quote as a loan to be priced against your own cost of capital.

You might also like our piece on the WhatsApp Business fees arriving on 1 October, the Comsol 5G network adding wholesale competition, and what the Big Mac Index rand figure says about what South Africans should be paying.

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