How much it costs to cancel your cellphone contract in South Africa

Cellular contract cancellation fees in South Africa vary significantly per provider, with Cell C, MTN, Telkom, and Vodacom each taking a different approach to how much they charge customers.

Mobile contract cancellations have been a hot topic in recent months. In October 2023, the National Consumer Tribunal slapped Vodacom with a R1-million administrative fine for denying customers the right to cancel their fixed-term contracts.

Between 2020 and 2022, several consumers complained that Vodacom denied them the right to cancel their fixed-term contracts by imposing a cancellation penalty of 75%.

Customers said the contract cancellation fee made it unaffordable to do so.

“Our contract cancellation policy, which came into effect on 1 October 2022, allows customers to cancel a SIM-only contract,” a Vodacom spokesperson told MyBroadband.

“Customers are required to give one calendar month’s notice of their intention to cancel. We require such notice to be given at the end of the calendar month in question.”

The mobile operator also amended its terms and conditions to reflect the change:

…in respect of the cancellation charges which Vodacom will charge where there is no Apparatus linked to the contract and the contract relates to a SIM card only package, then Vodacom will charge a cancellation charge equivalent to one month of the monthly subscription fee.

Notice under these circumstances can be given at any month during the contract period but the one-month notice period will be calculated from the last day of the month that notice was given in…

Customers were previously charged 75% of the outstanding balance of their contract to cancel, regardless of whether they were on a SIM-only or device contract.

Following the changes to Vodacom’s contract cancellation policy, MyBroadband compared the process of cancelling a cellular contract through Cell C, MTN, Telkom, and Vodacom.

Vodacom

For customers on SIM-only contracts, Vodacom will only charge a cancellation fee equivalent to one month’s subscription.

However, a cancellation fee of 75% of the outstanding balance of the contract will still be charged where a device is tied to the contract.

“Either party may terminate this Agreement during the Initial Period or a Renewal Period by providing at least 20 (twenty) business days’ notice to the other party in writing,” Vodacom says in its terms and conditions.

“A reasonable premature cancellation charge for the purposes of this clause shall mean 75% of the balance of your contract.”

Assuming the contract has run for at least six months, the cancellation fee for a two-year R800 smartphone contract is calculated as follows:

Cancelling after six months: [(R800 x 18) x 75%] = R10,800

Cancelling after a year: [(R800 x 12) x 75%] = R7,200

Cancelling after 18 months: [(R800 x 6) x 75%] = R3,600

MTN

MTN also requires customers cancelling their contract to provide 20 days’ notice before MTN can process the termination.

The cancellation fee comprises one month’s payment and the outstanding amount for the handset. Any remaining usage charges will also be added to this total.

Customers can call 135 from an MTN number to start the process, and billing agents will provide a breakdown of the cancellation costs.

For example, MTN currently sells the Samsung Galaxy A54 5G on its Mega Gigs XS plan for R519 per month over two years.

The handset makes up R360 of the monthly price, while the plan costs R159. The cancellation fees for the contract are calculated as follows:

Cancelling after six months: (R360 x 18) + R519 = R6,999

Cancelling after a year: (R360 x 12) + R519 = R4,839

Cancelling after 18 months: (R360 x 6) + R519 = R2,679

Cell C

Cell C determines contract cancellation fees based on the following:

• The remaining value of the handset at the time of the cancellation request
• The amount on the current month’s invoice
• 50% of the remainder of the contract period and the subscription fees

As Cell C doesn’t specify how much the handset contributes to the monthly subscription fee, simulating the calculation with an exact example is challenging.

Assuming a R400 per month contract to which the handset contributes R250 each month, the cancellation fee can be determined as follows:

Cancelling after six months:

Handset: R250 x 18 = R4,500

Subscription: (R150 x 18) x 0.5 = R1,350

Total: R4,500 + R1,350 = R5,850

Cancelling after a year:

Handset: R250 x 12 = R3,000

Subscription: (R150 x 12) x 0.5 = R900

Total: R3,000 + R900 = R3,900

Cancelling after 18 months:

Handset: R250 x 6 = R1,500

Subscription: (R150 x 6) x 0.5 = R450

Total: R1,500 + R450 = R1,950

Telkom

Unlike the rest, Telkom specifies a notice period of 30 days for contract cancellations rather than the Consumer Protection Act-stipulated 20 days.

Cancellation fees include outstanding handset payments and a R809 penalty.

“The cancellation fee value is predominantly made up of the remaining device fees, and this depends on the remaining time on the contract and original device,” Telkom says.

“Telkom has to charge device fees as we have already incurred the costs and therefore have to recoup our investment.”

Telkom doesn’t explicitly specify the handset contribution to its monthly subscription fees. However, it sells the Samsung Galaxy A54 5G on a 24-month FlexOn 2 contract for R499 monthly.

The FlexOn 2 plan costs R119 per month alone, yielding a rough handset price of R380 per month. Telkom’s cancellation fee is calculated as follows:

Cancelling after six months: (R380 x 18) + R809 = R7,649

Cancelling after a year: (R380 x 12) + R809 = R5,369

Cancelling after 18 months: (R380 x 6) + R809 = R3,089