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

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

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-2000 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.

While Neotels financial performance is improving, Telkom has been struggling since it divested its share in the countrys leading mobile network and started its own mobile business. The company has also made losses with international investments and legal disputes and has been fined for anticompetitive behaviour. Korea Telecom has expressed an interest in acquiring part of Telkoms equity, but the South African government refused to back the deal.

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.

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. 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. Several additional terabit cables are scheduled to go live in 2014, connecting Africa directly to the Americas.

Key developments:

SNO performance improves while incumbent struggles;
Government blocks foreign investment in Telkom SA;
Many national and metropolitan fibre network rollouts;
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.

1. Synopsis
2. Market overview
2.1 Fixed-line statistics
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 Network infrastructure
3.1.5 Wireless Local Loop (WLL)
3.1.6 Telephone tariffs
3.1.7 Prepaid fixed-lines
3.1.8 Data services and leased lines
3.1.9 Global network services
3.1.10 ISDN
3.1.11 PBX
3.1.12 VSAT
3.1.13 International expansion
3.1.14 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 Network infrastructure
3.2.5 Services and market potential
4. National fibre infrastructure
4.1 Telkom and Neotel
4.2 Broadband InfraCo
4.3 Dark Fibre Africa
4.4 Mobile operators
4.4.1 Vodacom
4.4.2 MTN
4.5 FibreCo
4.6 Fibre to the Home (FttH)
5. National private networks
5.1 Overview
5.2 Transtel
5.3 Eskom
5.4 Other electricity utilities
5.5 State IT Agency (SITA)
6. Sentech
7. Municipal networks
7.1 Knysna – Africa’s first municipal network
7.2 City of Tshwane
7.3 City of Johannesburg
7.4 Ekurhuleni (East Rand)
7.5 City of Cape Town
7.6 eThekwini (Durban)
7.7 Gauteng Link
8. International infrastructure
8.1 Submarine fibre
8.1.2 Seacom
8.1.3 EASSy
8.1.4 WACS
8.1.5 ACE
8.1.6 SAEx, WASACE
8.2 South African Power Pool
8.3 Satellite
9. Related reports
Table 1 – Fixed lines in service by operator and teledensity in South Africa – 1999 - 2013
Table 2 – Telkom SA shareholders of more than 2% and free float – March 2012
Table 3 – Telkom SA telephone tariffs – March 2013
Table 4 – Telkom SA prepaid fixed lines – 2002 - 2012
Table 5 – Telkom SA’s fixed line data revenue and annual change – 2002 - 2012
Table 6 – Telkom SA ISDN channels – 2000 - 2012
Chart 1 – Fixed lines in service and teledensity in South Africa – 2002 - 2013

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