If you are under debt review and your cellphone contract is ending — or your phone has broken and you need a new one — you are probably wondering whether you can sign a new contract. The answer depends on whether the contract includes a device or not. Let us explain exactly what is allowed and what is not.
Why Cellphone Contracts Are Credit Agreements
Most people do not think of a cellphone contract as "taking out credit", but legally, that is exactly what it is when a device is included. When you sign a 24-month or 36-month cellphone contract that comes with a handset, the network provider is giving you a device worth thousands of rands upfront and allowing you to pay it off over the contract period. This is a form of deferred payment — you receive goods now and pay for them later.
Under the National Credit Act (NCA), any arrangement where goods are provided on deferred payment terms qualifies as a credit agreement. This means your cellphone contract with a device is regulated by the NCA in exactly the same way as a personal loan, credit card, or vehicle finance agreement.
Section 88(1) of the NCA is clear: a consumer who has been placed under debt review may not enter into any new credit agreement until a clearance certificate has been issued. Because a cellphone contract with a device is a credit agreement, it is prohibited during debt review. Network providers are required to check your credit profile, and your debt review flag will appear immediately.
Can You Keep Your Existing Cellphone Contract?
Yes. If you already have a cellphone contract when you enter debt review, it continues as normal. Your debt counsellor will include the monthly cellphone payment in your restructured budget as an existing obligation. You continue making payments on it just as you do with all your other debts.
Your existing contract is not cancelled or affected by entering debt review. The network provider cannot terminate your contract simply because you are under debt review, as long as you continue to make the agreed payments. Your phone number, data allowance, and all contract benefits remain the same.
If your cellphone contract is one of the debts contributing to your over-indebtedness, your debt counsellor may include it in the restructured repayment plan with reduced payments and extended terms, just like any other credit agreement.
What About Upgrades?
This is where things get nuanced. When your existing contract reaches its upgrade date, whether you can upgrade depends on the type of upgrade:
- Upgrade with a new device: This is treated as a new credit agreement because you are receiving a new handset on deferred payment terms. The network provider will run a credit check, see the debt review flag, and in almost all cases decline the upgrade. This is prohibited under Section 88.
- SIM-only renewal (no device): A SIM-only plan is a service agreement — you are paying for airtime, data, and network access, not for a physical device on credit. Because no credit is extended, this may be permitted. However, some providers still run credit checks for SIM-only contracts and may decline based on your debt review status.
In practice, most network providers in South Africa (Vodacom, MTN, Cell C, Telkom) will decline any new contract or upgrade when they see the debt review flag on your credit profile. Even if the product technically qualifies as a service agreement, the provider's internal credit policy may still block the application.
SIM-Only vs Device Contracts
| Type | Classification | Allowed Under Debt Review? | Reason |
|---|---|---|---|
| SIM-only plan | Service agreement | Generally yes | No device on credit — you are paying for a service only |
| Month-to-month SIM-only | Service agreement | Generally yes | No lock-in, no device — pure service agreement |
| Contract with device (24/36 months) | Credit agreement | No | Device is provided on deferred payment — this is credit under the NCA |
| Upgrade with new device | Credit agreement | No | New device on credit terms — treated as a new credit agreement |
| Prepaid | Not an agreement | Yes | Pay as you go — no credit check, no contract, no restrictions |
6 Affordable Alternatives to a Cellphone Contract
Being under debt review does not mean you have to go without a phone. There are several practical and affordable alternatives that do not require a credit check or contract:
1. Prepaid SIM Card
The simplest option. Buy a prepaid SIM from Vodacom, MTN, Cell C, or Telkom and load airtime and data bundles as you need them. No credit check, no contract, no monthly commitment. You control exactly how much you spend each month. All four major networks offer competitive prepaid data bundles — often as low as R29 for 1GB of data.
2. Cash Purchase of a Handset + Prepaid SIM
If your current phone is broken or outdated, you can buy a new handset outright with cash. A cash purchase is not a credit agreement, so Section 88 does not apply. Affordable smartphones start from as little as R800 to R1,500 for reliable brands. Pair it with a prepaid SIM and you have a fully functional smartphone with no credit involved.
3. WiFi for Data-Intensive Tasks
Use WiFi at home, at work, or at public hotspots for streaming, downloading, and browsing. This dramatically reduces the amount of mobile data you need to purchase. Many shopping centres, libraries, and restaurants offer free WiFi. By doing your heavy data usage over WiFi, your prepaid data costs can drop to almost nothing.
4. VOIP Apps (WhatsApp, Skype, Zoom)
Voice over Internet Protocol (VOIP) apps allow you to make voice and video calls over WiFi at no additional cost. WhatsApp calls, Skype, Zoom, and Google Meet are all free to use when connected to WiFi. This eliminates the need for expensive airtime for calls. Many businesses and contacts now prefer WhatsApp calls over traditional phone calls anyway.
5. Lay-By a Phone
Lay-by allows you to pay for a phone in instalments before you receive it. Unlike credit, you only get the device once you have paid the full amount. This is not a credit agreement under the NCA because no goods are delivered until payment is complete. Retailers like Game, Makro, and various cellphone shops offer lay-by options on handsets.
6. Month-to-Month SIM-Only Plans
Some network providers offer month-to-month SIM-only plans that include a set amount of data, airtime, and SMS for a fixed monthly fee — without a device. Because there is no device on credit, these are service agreements. They offer better value than buying individual bundles, and you can cancel at any time. Check with your preferred provider whether they will accept customers under debt review for SIM-only plans.
Practical Tips for Saving on Cellphone Costs During Debt Review
Managing your cellphone costs carefully during debt review can free up money for your debt repayments. Here are some practical strategies:
- Track your actual usage: Most people overestimate how much data and airtime they need. Check your usage history for the past three months and buy bundles that match your actual needs — not what you think you need.
- Buy data bundles during promotions: Networks regularly offer discounted data bundles, especially on public holidays and month-end. Stock up during these promotions to save significantly.
- Use WiFi calling: Switch to WhatsApp or Telegram calls when you are on WiFi. This costs zero airtime and uses minimal data when on a WiFi connection.
- Disable background data: Apps running in the background consume data without you realising it. Go into your phone's settings and restrict background data for apps you do not need to update constantly.
- Compare prepaid bundle prices: Different networks offer different pricing. A R99 bundle on one network might give you 2GB, while the same amount gives you 3GB on another. Compare before you buy.
- Consider a dual-SIM phone: Some consumers use two SIMs from different networks to take advantage of the best deals from each provider. Many affordable smartphones support dual SIM.
The short answer: You cannot get a new cellphone contract that includes a device. But you CAN use prepaid, SIM-only deals, and VOIP apps. Most people under debt review find that prepaid actually works out cheaper.
If you are not yet under debt review and want to understand how the process works, read our comprehensive guide on what is debt review.
Frequently Asked Questions
Can I get a new cellphone contract with a handset under debt review?
No. A cellphone contract that includes a device is classified as a credit agreement under the National Credit Act because you are receiving a handset on deferred payment terms. Section 88(1) prohibits you from entering into any new credit agreement while under debt review. No network provider may legally approve this type of contract for you.
Can I keep my existing cellphone contract during debt review?
Yes. Your existing cellphone contract remains in place and is factored into your debt review budget. You continue making payments on it as part of your restructured repayment plan. Your debt counsellor will include this as an existing obligation.
Can I get a SIM-only or month-to-month plan under debt review?
Generally yes. A SIM-only plan that does not include a device is a service agreement, not a credit agreement, so it does not fall under Section 88 of the NCA. However, some providers may still run a credit check and decline based on your debt review flag. Prepaid is always an option with no credit check required.
Can I upgrade my cellphone contract during debt review?
In most cases, no. An upgrade that includes a new device is treated as a new credit agreement. Even if you are an existing customer, the network provider will run a credit check and see the debt review flag on your credit profile. Most providers will decline the upgrade. A SIM-only renewal without a device may be possible with some providers.
What is the cheapest way to stay connected during debt review?
Prepaid is the most affordable option. Buy airtime and data bundles as you need them with no monthly commitment. Combine this with WiFi at home or work for data-intensive tasks, and use free VOIP apps like WhatsApp calls, Skype, or Zoom for voice and video calls over WiFi. Many people under debt review find that prepaid actually costs less than a contract.
