Pepcor Holdings' The JSE-listed retailer's interim results on Tuesday showed the cellular business has moved decisively from selling phones to financing them, with its smartphone rental book growing to R2.6 billion in the six months to March 31, 2026, even as overall handset volumes declined.
of group phoneyam The smartphone rental product activated 1.3 million new accounts during the half period – a 32% increase from the comparable period – taking its active customer base to 2.4 million. The rental book has grown from R1.7 billion a year ago, expanding 53% in 12 months.
By contrast, total handset sales across Pepcor's brands stood at about 6.7 million units for the six months – broadly flat compared with the 6.8 million recorded a year earlier, when the group cited GfK data showing it had sold Eight out of every 10 prepaid handsets in South Africa. That market share figure is not included in this set of results.
On average, 4.9 million handsets were sold (up 4.1%) and 750,000 FoneYam accounts were activated (up 42%). At Ackermans, 1.6 million handsets were sold (up 6.2%) and 531 000 FoneYam accounts were activated (up 14%).
The Specialty division, which includes the Tekki Town, Dunce, Code, Refinery and recently acquired Legit, Swaga, Style and Boardman brands, sold 225 000 handsets (up 42%), including 35 000 phone activations following the launch of the product in the segment during the period.
Pepcor's newly separated financial services segment – which includes Capfin (lending), Abacus (insurance) and Foneum along with the group's potential bank PlusB – saw revenue rise 41.6% to R3-billion in the half, with operating profit rising 63.4% to R691-million. Pepkor said profits in the cellular rental and insurance businesses combined have doubled.
recurring revenue
Recurring revenue stream is also important. Pepcor's active cellular SIM base now exceeds 30-million, and ongoing revenue generated from that base grew 13.4% in the half to R1.1-billion. The group said the rate of customers renting a second phone after completing their first phone is exceeding expectations, indicating that the customer lifetime value on the product is running ahead of the internal model.
The scale of Pepcor's cellular operations sits awkwardly with the traditional view of the South African mobile market, which is typically focused on the operators, Vodacom, MTN, Cell C and Telkom. Pepcore is not a network operator and does not appear in the most quoted market share data – but its 6 657-store physical footprint, deep customer credit infrastructure and the financing layer provided by FoneYam position it structurally different from any operator's retail channels.
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The pivot is also a counter-cyclical bet on smartphone affordability. South Africa's electronics retail market has been weighed down by rand weakness and AI-driven component price inflation. By financing a rental period of several months rather than selling the handset outright, FoneYam absorbs some of the affordability shock for low-income consumers – and turns a one-time device sale into a multi-month income stream.
Pepkor cited its retail footprint, customer acquisition capabilities and financial services platform as the basis for its planned expansion into banking through PlusB. The group submitted its Section 16 application to the Prudential Authority in late March 2026 – the final regulatory step before it is officially registered as a bank. – © 2026 NewsCentral Media