Telecoms & IT
From The Report: South Africa 2014
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Four main mobile operators and two fixed-line players cater to subscribers in a market that – like much of the emerging world – is seeing slowing subscriber growth and price cuts encourage a shift towards new value-added services. Delays by government agencies were cited as the biggest problem facing mobile operators, particularly in terms of getting permission to build infrastructure. Spectrum allocation delays also inhibit industry progress. The erosion of the fixed-line market will continue as mobile penetration keeps ticking upwards. There will, however, be convergence in some areas, such as termination rates. Data will continue to dominate growth as voice revenues fall and prices get even leaner.

The ICT sector is growing rapidly in terms of numbers connected, speeds attained and services provided. The industry as a whole is by far the largest and most sophisticated on the continent, contributing around 6% to GDP. Robust growth has benefitted in part from strong government support and high levels of corporate consumption; however, it has also faced challenges with last-mile linkages and infrastructure constraints. The increasing deployment of fibre means that broadband performance is set to improve further, as fibre has latency of 1.5 to 2 milliseconds, whereas digital circuits are more than one hundred times slower. Growth in the ICT sector will continue to be robust, as strong levels of investment are maintained and SMEs sustain demand in promising subsectors like cloud computing.

This chapter contains interviews with Sipho Maseko, CEO, Telkom; and Orlando Ayala, Corporate Vice-President & Chairman – Emerging Markets, Microsoft.

Articles from this Chapter

Overview

Big and small operators disagree on the industry’s trajectory
OBG
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Four main mobile operators and two fixed-line players cater to subscribers in a market that – like much of the emerging world – is seeing slowing subscriber growth and price cuts encourage a shift towards new value-added services. The country’s infrastructure remains among the most competitive on the continent, although operators are grappling with mobile termination rates and the growing role of over-the-top (OTT) players, as well as policy clarity on spectrum allocation and local loop unbundling…

Analysis

Continuing spectrum allocation delays frustrate operators
OBG
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As with many markets, South Africa’s spectrum allocation is the purview of the government, which controls and regulates the process through the Independent Communications Authority of South Africa (ICASA). Operators are increasingly frustrated with the spectrum shortage, pointing to growing consumer demand and government inefficiencies. The government has also been chastised for failing to free up more spectrum by completing the transition to digital TV broadcasting. Back & Forth MTN and…

Interview

OBG talks to Sipho Maseko, CEO, Telkom
OBG
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Interview:Sipho Maseko What impact can increased data usage have on average revenue per user (ARPU) growth? SIPHO MASEKO: I believe ARPU will increase; however, the driver will not be connectivity alone, but rather the additional provision of value-added services. As people drive up their data usage, ARPU will also rise. Furthermore, I believe e-commerce will serve to boost ARPU as well, particularly given the convergence between the retail, telecommunications and financial services sectors.…

Analysis

Satellite strides: Overhead connectivity rises to supply isolated businesses
OBG
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In 2009 the installation of the first undersea cable providing connectivity to South Africa was heralded as the end of satellites as links to the outside world; however, five years later satellite connectivity remains just as relevant given its cost-effectiveness in expanding broadband coverage to rural and low-income areas. According to the 2014 broadband commission report from the International Telecommunication Union (ITU), although broadband communication mainly uses terrestrial links, satellites…

Analysis

Operators push regulator to finalise policy on infrastructure sharing
OBG
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Operators push regulator to finalise policy on infrastructure sharing Unbundling the loop The country is facing a dilemma when it comes to network sharing. In the telecoms sector, companies that have invested vast sums in network infrastructure are understandably reluctant to allow competitors to piggyback on their investment; however, South Africa’s comparatively high rates have the regulator contemplating network infrastructure sharing – local loop unbundling (LLU) – in a bid to bring down…

Interview

OBG talks to Orlando Ayala, Corporate Vice-President & Chairman – Emerging Markets, Microsoft
OBG
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Interview:Orlando Ayala What can be done to address the digital divide in emerging markets? ORLANDO AYALA: The digital divide is a persistent problem in underserved communities, be they in emerging markets or more developed countries. Today, broadband connection is vital for all populations to access commerce, citizen services, social networks and learning and skills development. This access should not be restricted based on income, education level or geography. Emerging markets have less…

Overview

Businesses and government share in support of ICT expansion
OBG
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The ICT sector is growing rapidly in terms of numbers connected, speeds attained and services provided. The industry as a whole is by far the largest and most sophisticated on the continent, contributing around 6% to GDP. Robust growth has benefitted in part from strong government support and high levels of corporate consumption; however, it has also faced challenges with last-mile linkages and infrastructure constraints. South Africa is working to expand broadband access and for good reason: a 2010…