The Telecommunications and Retail of Devices in South Africa 2024

This report focuses on the South African telecommunications industry and the market for mobile electronic devices. It focuses on telephony, internet and mobile broadband (wireless internet), and the relevant supporting infrastructure. It provides comprehensive information on telephony and internet access, telecoms revenue, capex, the fibre optic network, mobile fixed and broadband subscriptions, network traffic, subscribers and prices. There is also information on the major players, corporate actions, influencing factors and technology and innovation.

There are profiles of 61 companies including major players MTN and Vodacom, Telkom, Cell C, and Rain, fibre companies such as Vumatel, Afrihost and FibreCo and cellphone companies including Huawei and Samsung.

Introduction

• South Africa has a well-established and competitive telecommunications industry, with major players including the MTN, Vodacom, Telkom, Cell C and Rain.
• About 60% of industry revenue is earned from mobile services (data, voice and messaging).
• The country has a high mobile penetration rate, with a significant portion of the population owning mobile phones.
• There has been significant telecommunications infrastructure development, with the expansion of 4G and the deployment of 5G networks.
• The retail market for electronic devices, particularly smartphones, is robust.
• The growth of ecommerce has affected the retail sector, as many consumers prefer to purchase devices online.
• Global smartphone manufacturers such as Apple, Samsung and Huawei have a significant presence.

Key Trends

• 5G rollout and expansion.
• Advancements in camera technology.
• Asian smartphone brands such as Huawei, Xiaomi and others are gaining traction.
• Digital transformation and integrating technologies like AI and machine learning.
• Ecommerce dominance.
• Expanding mobile accessories market, such as cases, chargers, wearables.
• Fibre-optic network expansion.
• Focus on sustainability
• Growth in smartphone adoption with a focus on mid-range devices.
• Improved network security and resilience.
• Increased demand for data and digital services, including mobile internet, streaming and apps.
• Introduction of foldable devices.
• Mobile financial services, including mobile banking and digital payment solutions.
• Regulatory developments relating to spectrum allocation and licensing.
• Remote work and the need for reliable connectivity, cloud services and video conferencing.
• Smart city projects, including smart infrastructure, IoT applications and data-driven urban planning.

Opportunities

• 5G network expansion, including deployment of infrastructure and services.
• Affordable smartphone access.
• Collaboration with local content providers and customisation for local preferences.
• Cybersecurity services.
• Deployment of IoT technologies, intelligent infrastructure and data analytics for urban development.
• Digital inclusion initiatives and rural connectivity projects.
• Ecommerce partnerships.
• Fibre-optic network deployment.
• Local manufacturing initiatives.
• Mobile financial services and fintech.

Challenges

• Affordability and access.
• Affordability and market saturation of mobile devices.
• Competition dynamics pose challenges for newer entrants.
• Competition from new entrants and alternative service providers, such as over-the-top platforms and services and mobile virtual network operators.
• Consumer privacy concerns.
• Digital divide.
• Ecommerce challenges such as cybersecurity threats, fraud and logistical issues.
• High cost of internet and data
• Highly competitive industry.
• Infrastructure investment and development including coverage to rural and underserved areas, and the need to upgrade the existing LTE/4G infrastructure.
• Maintaining consistent and high-quality service is an ongoing challenge, including network congestion, downtime and service disruptions.
• Network security concerns.
• Regulatory complexity.
• Spectrum availability and allocation challenges.
• Supply chain disruptions.
• Technological obsolescence.

Market Outlook

• Customer demands are becoming increasingly sophisticated, with requirements such as seamless connectivity, competitive pricing, personalised experiences, innovative solutions and exceptional customer service.
• The industry will be driven by the expansion of the mobile subscriber base, growing 4G subscriptions, projected growth in 5G service adoption, increasing mobile internet subscriptions and increasing the mobile data average revenue per user.
• Fixed broadband service revenue will also increase, supported by robust growth in fibre to the home subscriptions and strong growth in fixed wireless lines.
• The increase in subscriber growth, demand for mobile data, digital transformation and bridging the digital divide are set to drive network expansion.