Vodacom adds four-year smartphone contracts

Vodacom has added 48-month smartphone contracts to its catalogue, enabling customers to pay a lower monthly fee than they would on a 24 or 36-month contract.

MyBroadband recently spotted the four-year contract options and asked the mobile operator about them.

A Vodacom spokesperson told MyBroadband that the company launched the contracts in the face of surging device costs in recent years.

“Our 48-month contract strategy aims to make high-end devices more affordable to our customers. This approach helps customers stay connected even during challenging economic times,” Vodacom said.

Regarding the popularity of the 48-month contract option, Vodacom says it is still early days, but it believes the customers taking it up are satisfied.

Financing devices over four years at a fixed monthly fee increases Vodacom’s exposure to inflationary risks. It also has to consider the time value of money.

The company said it manages these with its “more-for-more” strategy.

“We always strive to minimise the impact of costs to customers. By adopting a ‘more-for-more’ strategy, we ensure that any inflationary pressures are managed in a way that continues to provide the best possible customer experience,” Vodacom said.

Asked about its contract cancellation terms, Vodacom said its policy remains unchanged.

According to Vodacom’s contract terms and conditions, customers who cancel device contracts before they are paid up will pay 75% of the balance of their contract.

Most of Vodacom’s 48-month contracts were marked as sold out on the mobile operator’s website at the time of publication. However, you can still view their details.

MyBroadband compared 24-month, 36-month, and 48-month contract pricing for the Huawei Pura 70 Pro 256GB across three of Vodacom’s RED Core plans.

The entry-level RED Core 1.3GB plan with 100 minutes with the Huawei Pura 70 Pro costs R579 monthly on the four-year contract, for a total contract price of R27,792. The plan provides an additional 1.3GB of Night Owl data.

The 48-month contract significantly reduces the monthly premium, with customers paying R729 per month on a three-year contract and R929 per month on a two-year contract.

The two-year contract’s price for the duration of the agreement costs R22,296, while the 36-month option costs R26,244.

Those who opt for the RED Core 2.6GB plan on a 48-month contract will pay R60 less per month than those on a 36-month contract and R160 less per month than those on two-year contracts.

However, they will spend significantly more in the long run, partly because Vodacom must continue providing the data and minute allocations for another 12 months.

It also needs to mitigate inflationary risks and account for the time value of money.

Over the entire four-year contract period, customers will pay roughly R6,600 more than those on 36-month contracts and R11,250 more than those on the shortest contract period.

Opting for the RED Core 6.5GB contract with 200 minutes on a 48-month contract brings the monthly fee under R1,000, with customers paying R899 per month.

Those on 36-month or 24-month contracts will pay R1,109 and R1,219 per month, respectively.

On the RED Core 2.6GB plan, a four-year contract costs R6,468 more over the entire period than a 36-month contract.

The table below compares Vodacom’s 24-month, 36-month, and 48-month contract pricing for the Huawei Pura 70 Pro 256GB across three RED Core data-centric plans.

The total costs of the contracts are shown in brackets.

Device	Plan	24-month	36-month	48-month
Huawei Pura 70 Pro 256GB	RED Core 1.3GB | 100 min (Top-up)	R929 (R22,296)	R729 (R26,244)	R579 (R27,792)
Huawei Pura 70 Pro 256GB	RED Core 2.6GB | 200 min (Top-up)	R989 (R23,736)	R789 (R28,404)	R729 (R34,992)
Huawei Pura 70 Pro 256GB	RED Core 6.5GB | 200 min (Top-up)	R1,219 (R29,256)	R1,019 (R36,684)	R899 (R43,152)