South Africa has a vibrant mobile market that has seen rapid uptake since competition was introduced to the sector in the 1990s. Market penetration is well above 100%, driven by separate subscriptions for voice and mobile broadband services, following the launch of third generation (3G) and LTE services.
Mobile broadband services rival available DSL fixed-line offerings in terms of both speed and price, and have consequently outpaced them in terms of subscriber numbers, although the introduction of LTE technology (also referred to as 4G) was held back by delays with suitable frequency spectrum allocations.
While emerging as the country’s leading broadband providers, the major mobile operators are also branching out into fixed services, fibre backbone networks, international fibre connectivity, mobile banking and entertainment in a rapidly converging environment. Fixed-line incumbent Telkom SA has reacted by launching its own mobile network.
The network operators are increasingly forced to find innovative ways of distinguishing themselves from the competition in order to gain and retain customers, and to streamline their operations. There has been speculation about mergers and acquisitions (M&A) among the smaller players, and major infrastructure sharing deals have been concluded. Mobile Virtual Network Operators (MVNO) have so far failed to have a major impact on the market.
Companies covered in this report:
Vodacom, MTN, Cell C, Telkom SA (Heita, 8ta), Virgin Mobile.