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The Telecommunications and Retail of Devices Industry in South Africa 2022

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    Report

  • 290 Pages
  • July 2022
  • Region: South Africa
  • Who Owns Whom
  • ID: 5892744

Introduction

Telecoms revenue is beginning to slow in South Africa and there is concern that poor economic growth could affect consumer spending, including on mobile devices and phones.

Demand for data has also fallen back to pre-pandemic growth levels, which experts attribute to the return to office or hybrid work. As traditional voice and data revenue slows, telecoms companies are investing in services such as fintech in a bid to grow revenue. Operators continue to invest heavily in fibre and in the rollout of 5G mobile networks.

Opportunities

Expansion of fibre networks and rapid consolidation in the fibre market.

Hyperscale cloud companies such as Microsoft and Amazon (which can hold large amounts of data in the cloud) are driving data centre demand. Increasing internet penetration and growing demand for data. Increasing smartphone ownership; growing demand for low-cost smartphones. Migration to 5G networks. Mobile money and mobile financial services in Africa. Social media, video, and music streaming platforms. The conclusion of the spectrum auction in March 2022 provides operators with further capacity to roll out mobile services. The decline in fixed voice telephone lines is an opportunity for VoIP providers to service voice customers. The establishment of a wireless open access network may provide opportunities for small businesses to enter the market.

Outlook

Amid slowing economic growth, the outlook remains uncertain. Telkom expects growth in its mobile business to continue to slow and fixed voice lines to continue to decline, while mobile revenue will moderate. Vodacom said inflation could impact customer affordability and weigh on economic growth. MTN said there was increased pressure in the prepaid business, particularly for lower-income customers affected by job losses.

Telecoms operator profits are being squeezed by regulators determined to reduce calls and data costs. Research company BMIT expects high growth in fibre to the home and in mobile data, tempered by price reductions due to the new spectrum available, 5G expansion and government pressure. Voice revenue will remain flat due to lack of demand and high pricing.

Report Coverage

This report focuses on the South African telecommunications industry and the market for mobile devices.

While the sector formally includes broadcasting and postal services, this report emphasises telephony, internet and mobile broadband, and the relevant supporting infrastructure. It includes comprehensive information on the state and size of the sector, revenue, subscriptions, capex, prices and developments including new spectrum allocation and corporate actions. There are profiles of 64 companies including major players such as Vodacom, MTN and Telkom, data-only network Rain, fibre companies such as Dark Fibre Africa, Vumatel and Afrihost, and retailers and device brands such as Cellucity, Nokia and Samsung.

Strengths

High levels of investment.

South Africa is well positioned as the gateway to provide telecommunications services to the region. The telecommunications sector forms the backbone of modern business and economies. Well-established infrastructure base and very large national networks.

Threats

Mobile operators complain that new mobile money taxes in other African countries could reduce customer uptake of the fintech services.

Outright regulation of data prices and regulation of large companies deemed to hold uncompetitive market power. Poor economic growth following the onset of the pandemic. Structural shift from voice to data and declining data prices. Sustained outages in electricity supply. Vandalism and theft of mobile operators’ network infrastructure.

Weaknesses

High barriers to entry, particularly licensing requirements and initial capital outlay. Increasing market maturity. Ineffective regulation and uncertain policy environment. Lack of radio frequency spectrum. Severe shortage of technical and service skills. Very high levels of concentration, particularly in mobile.

Table of Contents

1. INTRODUCTION
2. DESCRIPTION OF THE INDUSTRY
2.1. Industry Value Chain
2.2. Geographic Position
2.3. Size of the Industry
2.4. Key Success Factors and Pain Points
3. LOCAL
3.1. State of the Industry
3.2. Key Trends
3.3. Notable Players
3.4. Corporate Actions
3.5. Regulations
3.6. Enterprise Development and Social Economic Development
4. AFRICA5. INTERNATIONAL
6. INFLUENCING FACTORS
6.1. COVID-19
6.2. Economic Environment
6.3. Labour
6.4. Environmental Issues
6.5. Technology, Research and Development (R&D) and Innovation
6.6. Electricity Supply
6.7. New Spectrum
6.8. Data Prices
7. COMPETITIVE ENVIRONMENT
7.1. Competition
7.2. Ownership Structure of the Industry
7.3. Barriers to Entry
8. SWOT ANALYSIS9. OUTLOOK10. INDUSTRY ASSOCIATIONS
11. REFERENCES
11.1. Publications
11.2. Websites
APPENDIX 1 - SUMMARY OF NOTABLE PLAYERS
  • Telecommunications
  • Devices
COMPANY PROFILES - TELECOMMUNICATIONS
  • A T C (Pty) Ltd
  • Afrihost SP (Pty) Ltd
  • Altron TMT (Pty) Ltd
  • ATC South Africa Services (Pty) Ltd
  • Bitco Telecoms (Pty) Ltd
  • Blue Label Telecoms Ltd
  • Bridging Technologies South Africa (Pty) Ltd
  • Broadband Infraco SOC Ltd
  • Business Connexion (Pty) Ltd
  • Celcom Group (Pty) Ltd
  • Cell C Ltd
  • Cybersmart (Pty) Ltd
  • Dark Fibre Africa (Pty) Ltd
  • Datapro (Pty) Ltd
  • Datatec Ltd
  • Dimension Data (Pty) Ltd
  • DNI-4PL Contracts (Pty) Ltd
  • Ekasi Fibre (Pty) Ltd
  • EOH Mthombo (Pty) Ltd
  • FibreCo Telecommunications (Pty) Ltd
  • Fibrepoynt (Pty) Ltd
  • FirstRand Bank Ltd
  • FoneWorx (Pty) Ltd
  • Frogfoot Networks (Pty) Ltd
  • Gateway Communications (Pty) Ltd
  • Huge Telecom (Pty) Ltd
  • Ignition Telecoms Investments (Pty) Ltd
  • IHS Towers South Africa (Pty) Ltd
  • Jasco Electronics Holdings Ltd
  • Liquid Telecommunications South Africa (Pty) Ltd
  • Metro Fibre Networx (Pty) Ltd
  • Mr Price Mobile (Pty) Ltd
  • MTN Group Ltd
  • MVN-X (Pty) Ltd
  • Nokia Solutions and Networks South Africa (Pty) Ltd
  • Nokia South Africa (Pty) Ltd
  • Rain GTM (Pty) Ltd
  • Reunert Ltd
  • Sabre Radio Networks (Pty) Ltd
  • SEACOM South Africa (Pty) Ltd
  • Sentech SOC Ltd
  • SGT Solutions (Pty) Ltd
  • Standard Bank of South Africa Ltd (The)
  • Swiftnet SOC Ltd
  • Telemasters Holdingsc Ltd
  • Telkom SA SOC Ltd
  • Teraco Data Environments (Pty) Ltd
  • Too Much WiFi (Pty) Ltd
  • Truteq Wireless (Pty) Ltd
  • Vodacom Group Ltd
  • Vox Telecommunications (Pty) Ltd
  • Vumatel (Pty) Ltd
COMPANY PROFILES - DEVICES
  • Cell C Ltd
  • Cellucity (Pty) Ltd
  • Core Computer Group (Pty) Ltd (The)
  • DNI-4PL Contracts (Pty) Ltd
  • FirstRand Bank Ltd
  • Hisense SA Sales Holdings (Pty) Ltd
  • Huawei Technologies Africa (Pty) Ltd
  • KNR Flatrock (Pty) Ltd
  • Lenovo (South Africa) (Pty) Ltd
  • LG Electronics S A (Pty) Ltd
  • MIA South Africa (Pty) Ltd
  • Microsoft (S A) (Pty) Ltd
  • Mr Price Mobile (Pty) Ltd
  • MTN Group Ltd
  • Samsung Electronics South Africa (Pty) Ltd
  • Standard Bank of South Africa Ltd (The)
  • Telkom SA SOC Ltd
  • Vodacom Group Ltd
  • ZA Online Store (Pty) Ltd
  • ZTE Corporation South Africa (Pty) Ltd

Companies Mentioned

  • Bitco Telecoms (Pty) Ltd
  • Bridging Technologies South Africa (Pty) Ltd
  • Cell C Ltd
  • FirstRand Bank Ltd
  • IoT.nxt B.V.
  • Liquid Telecommunications South Africa (Pty) Ltd
  • Mr Price Mobile (Pty) Ltd
  • MTN Group Ltd
  • Openserve (Pty) Ltd
  • Sarmady Communications LLC
  • Standard Bank of South Africa Ltd (The)
  • StarNet Egypt SAE
  • Swiftnet SOC Ltd
  • Telkom SA SOC Ltd
  • Vodacom Group Ltd
  • Vodafone Data LLC
  • Vodafone Egypt Telecommunications S.A.E.

Methodology

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