I like the idea - but have to wonder what the adoption levels will be like. Will Mxit become a tool for spreading literacy among its mostly youthful users or will they stick to only using it for chat? That remains to be seen.
It looks like at this stage the books available will only be from established legacy publishers. In my opinion that's a real pity as this sort of edgy, tech-driven development with its potential appeal to a target demographic that tends to be a bit anti-establishment and open to new ideas would lend itself well to small-scale and indie publishing.
Hopefully as time goes by opportunities will open up for small-press and even independent publishers to participate. I would guess that this type of material may prove to be more popular in this type of forum than more mainstream, commercially-driven content.
Anyway, kudos to NATIVE for thinking out of the box coming up with the idea. I hope it really take off and gets more people reading.