Telecoms & IT

South Africa Telecoms and IT

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.

Cover of The Report: South Africa 2014

The Report

This chapter is from the South Africa 2014 report. Explore other chapters from this report.

Interviews & Viewpoints

Sketch of Sipho Maseko, CEO, Telkom
OBG talks to Sipho Maseko, CEO, Telkom

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