JSE-listed retailer Pepkor Holdings has significantly strengthened its dominance in the South African prepaid cellular market, with recent data indicating that eight out of every ten prepaid handsets sold in the country now pass through its stores. This marks a substantial increase from 70% to 80% in market share over the past year, according to March 2025 research from GfK and the Retailers’ Liaison Committee, representing a growth of over 14% in this segment.

In its interim financial results for the six months ending March 2025, Pepkor reported a 17% increase in the number of cellular handsets sold, reaching a total of 6.8 million units. This surge in sales is accompanied by a notable rise in smartphone penetration, with smartphones now accounting for 65% of all handsets sold by the group, up from 60% in the previous comparable period. Pepkor attributes this to its efforts in making smartphones more affordable for a wider consumer base.

A key driver of this affordability and growth is FoneYam, Pepkor's cellular handset rental product launched in 2024. The initiative has seen strong uptake, with active customers surpassing the 1.5 million mark by the end of March 2025. Monthly activations for FoneYam averaged 165,000 during the reporting period, a significant increase from the previous average of 120,000. Pepkor highlighted that FoneYam has \"made a meaningful contribution to group profitability\" by successfully addressing previous affordability barriers for customers seeking smartphones.

This robust performance in the cellular division has significantly contributed to Pepkor's overall financial health. The group announced a 12.4% rise in half-year earnings, with headline earnings per share (Heps) from continuing operations increasing to 84.3 cents from 75 cents a year ago. Normalised Heps showed even stronger growth at 18.9%. Group revenue expanded by 12.8% to reach R48.8 billion, bolstered by improved product availability as local port congestion issues subsided, and the consistent strong growth in cellular connectivity.

Breaking down the revenue, Pepkor’s clothing and general merchandise segment, which includes popular brands like Pep and Ackermans, saw revenue increase by 9.5% to R34.5 billion. The furniture, appliances, and electronics segment grew by 9.1% to R6.5 billion. Notably, the fintech business demonstrated impressive growth, with revenue surging by 34.5% to R7.9 billion, largely driven by a 67.3% expansion in financial services.

Pepkor emphasized that its expansive store network, currently comprising around 5,975 stores, serves as a powerful distribution channel. The company plans to further extend its reach by opening between 250 and 300 new stores in 2025. This strategy, combined with a focus on affordability and a resilient business model, has cemented Pepkor's position as the clear leader in the South African cellular market, particularly catering to the approximately 34.3 million low-income earners who constitute a significant portion of the country's population.