CAPE TOWN (Reuters) - South Africa's biggest mobile operator Vodacom is looking at taking a new low-price phone that uses the cloud to offer smartphone-style features to other African markets, an executive said on Wednesday.

Mobile internet penetration in sub-Saharan Africa was just 27% at the end of 2023, with millions struggling to access services because smartphones are too expensive or network coverage unavailable, according to the GSMA industry body.

The South African unit of Vodacom, majority-owned by Britain's Vodafone, recently launched a cloud-based smart feature phone, which is manufactured by South African mobile phone firm Mobicel. Vodacom is a reseller.

Vodacom introduced it as a way to reduce the cost of smartphone access and to accelerate migrating customers from legacy 2G and 3G networks to modern 4G networks as South Africa starts phasing out these older networks.

"We have sold roughly a bit less than 100,000 devices in South Africa," Davide Tacchino, managing executive for terminals at Vodacom South Africa, told Reuters at the Africa Tech conference, adding that the company was seeing interest from customers and distributors.

"At this stage, it's South Africa, but we are evaluating to expand in the other markets."

The phone, retailing at 199 rand ($11), leverages the power of cloud computing to deliver a range of features typically associated with entry smartphones at a more affordable cost.

It comes with popular applications such as YouTube, TikTok and Facebook, all accessed via the cloud, giving users a "smartphone lite" experience.

Mobile operators are racing to shift their customers to 4G and 5G networks as South Africa has proposed gradually phasing out and shutting down older networks by the end of 2027.

As well as introducing more affordable devices, operators are offering pre-paid device financing options, but they have also asked the government to cut taxes on smartphones.

South Africa's Communications Minister Solly Malatsi told Reuters on Tuesday that he had held encouraging preliminary talks with the Treasury about his proposals to cut those taxes.

($1 = 18.1781 rand)

(Reporting by Nqobile Dludla. Editing by Mark Potter)