South Africa - Broadband Market - Insights, Statistics and Analysis

South Africa's broadband market has taken off after years in which it had been held back by an expensive operating environment created by Telkom's dominance in the fixed-line and international bandwidth market. Wireless broadband services have carved out market share from existing ADSL offerings, though this is dominated by mobile network operators. Several WiMAX networks have been shut down as consumers migrate to 3G and LTE mobile networks for internet connectivity. Given that its fixed-line network reaches less than 10% of the population, Telkom has responded to these market pressures by launching its own mobile network, and so is able to tap into burgeoning consumer demand for internet services and mobile broadband. At the same time, Telkom is also facing increased competition in the fibre optic sector.

The landing of four international submarine fibre-optic cables in South Africa between 2009 and 2012 has brought down the cost of international bandwidth dramatically. Additional cables with terabit capacity have come on stream during the last three years. Previously, Telkom monopolised access to the only major cable serving the country, and so was able to demand very high access prices.

A new converged licensing regime has created hundreds of companies licensed to offer internet services. There has been consolidation in the sector which is expected to continue.

Key developments:

Department of Telecommunications allocated ZAR1.4 billion from the 2015 budget to pursue broadband initiatives; Telkom makes bid to buy BCX for ZAR2.7 billion; Multisource makes bid to acquire iBurst and WBS; Vox Telecom's owners cancel plans to sell up; Neotel halves price of fibre broadband; cost of international fibre bandwidth reduced following end of monopoly; LLU creates new opportunities for fixed broadband players; Google tests wireless broadband using White Space' spectrum; Telkom assesses plans to convert public payphones into WiFi hotspots; MTN connects first customers to its FttP network; MWEB launches Fon-enabled WiFi routers; Vumatel extends open-access network offering 1Gb/s services.

Companies mentioned in this report:

Telkom, Neotel, Vodacom, MTN Network Solutions, Cell C, Atlantic Internet Services, Business Connexion, Internet Solutions, Verizon Business, MWEB, Vox Telecom (DataPro), Sentech, iBurst (WBS, Blue Label).