South Africa - Fixed-line Market and Fibre Infrastructure - Overview and Statistics
South Africa's second national operator Neotel has been gaining market share in competition with fixed-line incumbent, Telkom SA. It is now in the process of being acquired by Vodacom, the country's leading mobile network operator. Neotel is using wireless technologies such as CDMA-2000, WiMAX and LTE to provide alternatives to Telkom'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.
While Neotels financial performance has been improving, Telkom has been struggling since it divested its share in Vodacom and started its own mobile business which it is now looking to sell. The company has also made losses with international investments and legal disputes and has been fined for anticompetitive behaviour.
To create more competition, the government has created Broadband InfraCo, a national infrastructure company to provide cheap backbone network capacity to service providers. The major mobile network operators, Vodacom and MTN, have also moved into the fixed-line and national fibre sector under a converged, service-neutral licensing regime. In addition, many municipalities in South Africa, including the country's largest cities, are implementing their own metropolitan fibre and wireless broadband networks. Several Fibre to the Home (FttH) deployments are underway.
All of the major players are involved in the various international submarine fibre optic cables that have reached the country in the past few years. This has brought down the cost of international bandwidth dramatically. Previously, Telkom had been monopolising access to the only major cable serving the country. Several additional terabit cables are scheduled to go live in 2014, connecting Africa directly to the Americas.
Telkom writes off legacy assets, invests billions into broadband infrastructure; Neotel takeover by Vodacom; Many national and metropolitan fibre network rollouts, including FttH; New international fibre optic submarine cables planned for 2014.
Companies covered in this report:
Telkom SA, Neotel (Tata), Vodacom, MTN, Broadband InfraCo, Transtel, Eskom, SITA, Sentech, Seacom, Dark Fibre Africa (DFA), Internet Solutions, FibreCo, eFive, WASACE.