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South Africa Telecommunications Report Q3 2010
Business Monitor International, June 2010, Pages: 102
South Africa Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Africa's telecommunications industry.
Our latest update on South Africa’s telecommunications market contains revised forecast figures for the country’s mobile telephony market. Our forecast revisions are based on Q409 and Q110 data published by South Africa’s leading mobile network operators.
The latest operator data suggest that South Africa had more than 50.5mn mobile customers at the end of 2009. This figure reflects growth of just 0.1% for the year. The main reason for the weak growth was the deduction of large numbers of inactive and unregistered prepaid customers from the sector. The deduction of customers resulted from the introduction of compulsory SIM registration in August 2009.
At the time of writing, South Africa’s leading mobile network operators, Vodacom and MTN, had both published subscriber figures for the three months ending March 31 2009. In the first three months of the year, Vodacom’s customer base shrank by 3.1% q-o-q, its customer numbers continuing to be adversely affected by the introduction of compulsory SIM registration in August 2009. In contrast, smaller rival MTN reported a 2.2% q-o-q increase in mobile customers. The operator has not provided an explanation for the strong performance. However, one explanation for MTN’s Q110 experience is that the operator has been able to absorb the impact of compulsory SIM registration while continuing to grow organically. It is interesting that South Africa’s smallest mobile network operator Cell C expanded its customer base by 8% in 2009. Although Cell C was also affected by the introduction of compulsory SIM registration in H209, it appears that the operator was less severely affected than its larger rivals.
BMI continues to hold the view that compulsory SIM registration will continue to influence the growth of South Africa’s mobile market well into 2010. However, we predict growth for the year as a whole, as well as an increasingly healthily subscriber mix in favour of postpaid customers. However, we maintain our view that the sector will see a return to limited customer growth in the latter part of our forecast. Growth will partly be underpinned by the continued expansion of South Africa’s population.
In April 2010, it was announced that construction of the Eastern Africa Submarine Cable System (EASSy) had been completed ahead of schedule. EASSy is planned to run from Mtunzini in South Africa to Port Sudan in Sudan, with landing points in nine countries. The first customers were expected to be connected to the network from July 2010. BMI views the launch of EASSy and several other international cable systems as a positive development for the long-term advancement of South Africa’s telecoms sector. As a result of increasing the amount of available international bandwidth, the new cable systems will contribute to lower costs and improved service quality for both businesses and consumers. South Africa has fallen from fourth to sixth position in BMI’s latest set of Business Environment Ratings for Sub-Saharan Africa. The main reason for South Africa’s lower ratings is the weaker Telecoms Market the country receives.
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