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South Africa Telecommunications Report Q1 2011
Business Monitor International, Nov 2010, Pages: 113
Business Monitor International's 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.
Dueingpast few months a number of developments have occurred which have important implications for South Africa’s telecoms market. In October 2010, it was announced that the country’s incumbent operator Telkom formally launched commercial 3G services under the 8ta brand. As a result, Telkom has become South Africa’s fourth mobile network operator. Telkom’s new mobile service offering is based on an endto- end all-IP 2G and 3G network, which has been future-proofed for 4G Long-Term Evolution (LTE) upgrades. Although Telkom plans to extend its new network nationally, it will initially offer services on the basis of a national roaming agreement with South Africa’s second-largest mobile operator MTN. According to South African financial daily BusinessDay, Telkom has plans to acquire a 10-15% share of the mobile market within five years.
Telkom is the fourth South African operator to announce the launch of next generation mobile services. In October 2010, the country’s third-ranked mobile operator Cell C confirmed its 900MHz HSPA+ network was operational in seven South African cities. The company will continue to expand in 2011 and aims to reach 67% of the population by mid-2011.
Meanwhile, it appears that the effects of compulsory SIM registration – first introduced on August 1 2009 – are continuing to have an effect on the country’s mobile sector. In the three months to 30 June 2010, mobile market leader Vodacom reported a net loss of more than 3mn customers. As a result of the major customer losses reported by Vodacom in Q210, we believe South Africa’s mobile sector will experience negative customer growth in 2010. Going forward, our revised mobile subscriber forecast for South Africa envisages a return to limited customer growth in our latter forecast years. Growth will partly be underpinned by the increasing South Africa population. Our forecast figures also reflect the continued likelihood of a certain number of multiple SIM owners.
Although our fixed telephony, internet and broadband subscriber forecasts remain unchanged this quarter, there have been a number of notable developments with implications for the wireline telecoms sector. In October 2010, it was reported that state-owned multimedia carrier Sentech was preparing to build a new national wireless broadband network. The firm’s previous attempt at launching a national WiMAX network, under the MyWireless brand, was shut down in November 2009 due to technological difficulties. Meanwhile, in August second national operator Neotel revealed it would predominately focus on winning business customers. This follows, what has been seen as, Neotel’s failure to penetrate the consumer market.
South Africa has risen from sixth to fourth position in BMI’s latest set of Business Environment Ratings for Sub-Saharan Africa. Although South Africa’s Country Risks score has fallen slightly, the country receives a stronger score in the Industry Rewards category.
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