South Africa - Fixed-line Market and Infrastructure - Overview and Statistics

Synopsis

South Africa’s second national operator Neotel is gaining market share in competition with fixed-line incumbent, Telkom SA. It is using wireless technologies such as CDMA and WiMAX to provide alternatives to the incumbent’s copper access network. Having bought and leased national fibre infrastructure from parastatals Transtel and Eskom and building its own fibre backbone network in parallel, Neotel is also operating as a provider of wholesale national and international connectivity to the business sector.

In addition, the government has created Broadband InfraCo, a national infrastructure company to provide cheap backbone network capacity to service providers, and the major mobile network operators, Vodacom and MTN, are moving into the fixed-line and national fibre sector under a converged, service-neutral licensing regime. Despite the significantly increased competition between different service providers, many municipalities in South Africa, including the country’s largest cities, are implementing their own fibre and wireless broadband networks.

All of the major players are involved in the various international submarine fibre optic cables that have reached the country in the past three years. The arrival of Seacom as the second international cable in 2009 has brought down the cost of international bandwidth dramatically. Previously, Telkom had been monopolising access to the only major cable serving the country, SAT-3/WASC/SAFE. A third international cable, EASSy landed in 2010, followed by ACE and WACS in late 2011.

Companies covered in this report:

Telkom SA, Neotel, Vodacom, MTN, Broadband InfraCo, Transtel, Eskom, SITA, Sentech, Amobia, Dark Fibre Africa, Internet Solutions.

Table of Contents

• 1. Synopsis
• 2. Market overview
• 3. Fixed network operators in South Africa
  • 3.1 Telkom SA Ltd
    • 3.1.1 Shareholder structure
    • 3.1.2 Business segments and services
    • 3.1.3 Financial results
    • 3.1.4 Telephone tariffs
    • 3.1.5 Data services and leased lines
    • 3.1.6 Global network services
    • 3.1.7 ISDN
    • 3.1.8 PBX
    • 3.1.9 VSAT
    • 3.1.10 International expansion
    • 3.1.11 Structural separation
  • 3.2 Neotel
    • 3.2.1 Licence conditions
    • 3.2.2 Shareholder structure and funding
    • 3.2.3 Financial performance
    • 3.2.4 Services and market potential
  • 3.3 Broadband InfraCo
  • 3.4 Amobia
• 4. National private networks
  • 4.1 Overview
  • 4.2 Transtel
  • 4.3 Eskom
  • 4.4 Other electricity utilities
  • 4.5 State IT Agency (SITA)
• 5. Sentech
• 6. Mobile operators establishing fixed networks
  • 6.1 Vodacom
  • 6.2 MTN
• 7. Telecommunications infrastructure
  • 7.1 Telkom’s national telecom network
    • 7.1.1 Fixed-line statistics
    • 7.1.2 Wireless Local Loop (WLL)
  • 7.2 Neotel’s network infrastructure
  • 7.3 Municipal networks
    • 7.3.1 Knysna – Africa’s first municipal network
    • 7.3.2 City of Tshwane
    • 7.3.3 City of Johannesburg
    • 7.3.4 Ekurhuleni (East Rand)
    • 7.3.5 City of Cape Town
    • 7.3.6 eThekwini (Durban)
    • 7.3.7 Gauteng Link
  • 7.4 Dark Fibre Africa
  • 7.5 Internet Solutions (Dimension Data)
• 8. International infrastructure
  • 8.1 Submarine fibre
    • 8.1.1 SAT-3/WASC/SAFE
    • 8.1.2 Seacom
    • 8.1.3 EASSy
    • 8.1.4 WACS
    • 8.1.5 ACE
    • 8.1.6 eFive
  • 8.2 South African Power Pool
  • 8.3 Satellite
• 9. Related reports

• Table 1 – Telkom SA top five shareholders – December 2011
• Table 2 – Telkom SA’s fixed line data revenue and annual change – 2002 - 2011
• Table 3 – Telkom SA ISDN channels – 2000 - 2011
• Table 4 – Fixed lines in service and teledensity – 1999 - 2012

• Chart 1 – Fixed lines in service and teledensity – 2002 - 2012