Publication Overview
This report provides a comprehensive overview of the trends and developments in the telecommunications markets of three African countries: The continent’s leading market, South Africa, as well as its two neighbours, Lesotho and Swaziland. Subjects covered include:
· Key statistics;
· Market and industry overviews;
· Regulatory environment and structural reform;
· Major players (fixed, mobile and broadband);
· Infrastructure development;
· Mobile voice and data markets;
· Average Revenue per User (ARPU) trends;
· Internet, including broadband development;
· Convergence (voice/data, fixed/wireless/mobile).
Researcher:- Peter Lange
Current publication date:- December 2008 (7th Edition)
Next publication date: - December 2009
Executive Summary
South Africa is the economic powerhouse and leading telecommunications market of the African continent. At around 100% market penetration, the country’s mobile operators are forced to find innovative ways of distinguishing themselves from the competition in order to gain and retain customers, save costs and develop new revenue streams. Their entry into the Internet sector with 3G/HSPA mobile broadband services, combined with media and entertainment content is one way of achieving this. Another is the rollout of fibre optic national backbone networks in competition with other infrastructure providers. The arrival of new international submarine fibre optic cables to the region in 2009 will bring down the cost of international bandwidth dramatically. The small kingdoms of Lesotho and Swaziland, although landlocked and largely dependent on their powerful neighbour, are expected to benefit from these developments as well.
South Africa boasts the continent’s most advanced telecom market in terms of technology deployed and services provided. Following years of delays with its licensing, the second national operator Neotel has finally launched services in competition to Telkom SA, using wireless technologies such as CDMA and WiMAX to provide alternatives to the incumbent’s copper access network. Billions of dollars are being invested in IP-based next-generation networks capable of delivering converged services more efficiently. In addition, the government has created InfraCo, a national infrastructure company to provide cheap backbone network capacity to service providers, and the mobile operators are rolling out their own national fibre optic backbone networks. Despite this significantly increased competition on the infrastructure level, many municipalities are implementing their own fibre and wireless broadband networks, including all of the major metro areas.
SA’s Internet and broadband market is finally taking off after years of stagnation due to an expensive operating environment created by Telkom’s dominance in the fixed-line and bandwidth market. The arrival of new international submarine fibre optic cables to the country’s shores in 2009 will bring down the cost of international bandwidth dramatically. With mobile market penetration at around 100%, South Africa’s mobile network operators are seeking new revenue streams from entering the broadband sector. Their 3G/HSPA mobile data services now rival available ADSL offerings in terms of both speed and price, and consequently subscriber numbers. With its fixed-line network reaching only 10% of the population, Telkom has reacted by launching its own 3G network and the country’s first commercial WiMAX wireless broadband service, but various competitors are hard on its heels rolling out the same technology.
This, in combination with sweeping liberalisation measures initiated four years earlier, legalising – among other things – the use of VoIP, is beginning to change South Africa’s telecoms landscape fundamentally. Under the new regulatory regime, alternative service providers are pushing into the market with converged services. VoIP revenue was expected to triple in 2008. ISPs are turning into phone companies, and vice versa. Both are moving into delivering media, entertainment and lifestyle content over their networks, while in turn the traditional electronic media carriers are discovering the potential of their infrastructure for telecommunications service delivery.
Telecommunications in Lesotho has undergone transformation from a state-owned monopoly to a privatised national operator, with competition in the mobile sub-sector between two networks, Vodacom and Econet. At around 25%, mobile market penetration is still below the African average. The use of wireless technology and fixed-mobile convergence has led to an accelerated increase of teledensity. Various forms of broadband Internet access are available. Although landlocked, Lesotho is set to benefit from the greater choice of international bandwidth sources that the arrival of several submarine fibre optic cables to the African east coast will bring in 2009.
The telecoms sector in Swaziland features an old-style posts and telecom monopoly operator for fixed services and one of the last mobile monopolies on the continent as well. Nevertheless, fixed and mobile penetration is relatively high compared with other countries in the region. The level of Internet usage, only about average in the region, has been held back by a lack of attractive broadband offerings, caused by the limited extent of the fixed-line network and limited options for affordable international bandwidth. The planned unbundling and eventual privatisation of the incumbent and the introduction of more competition would enable the market to live up to its relative GDP strength.
Key highlights:
· Mobile market reaches 100% penetration in South Africa, mobile data revenue growing at around 45% per annum;
· South African SNO Neotel exceeds 2008 revenue target;
· Third fixed-line licence and fourth mobile licence expected in South Africa in 2009;
· Telkom SA exits Vodacom, launches own 3G network;
· More 3G/HSPA mobile broadband users than ADSL subscribers in South Africa;
· South African mobile operators launch fibre backbone networks;
· South Africa has three commercial WiMAX networks, WiMAX spectrum auction to be held in 2009;
· 3G/HSDPA services launched in Lesotho;
· Fixed-line, mobile and Internet/broadband market forecasts to 2010 and 2015 for Swaziland.
Telkom ADSL wholesale services – 2007 - 2008
|
Year
|
Wholesale services
|
|
2007 (Sep)
|
2,545
|
|
2008 (Mar)
|
18,740
|
(Source: BuddeComm based on company data)
Data in this report is the latest available at the time of preparation and may not be for the current year.
The following notes provide some background to our scenario forecasting methodology:
· This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.
· The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.
· All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.
For those needing high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:
· Government policies affecting the telecoms industry;
· Market liberalisation;
· Telecoms operators – privatisation, acquisitions, new licences and competition;
· Internet and broadband development and growth;
· The fast growing mobile markets of the region;
· Average Revenue per User (ARPU) statistics;
· Mobile application and content developments.