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South Africa - Telecoms, Mobile and Broadband

This annual report provides a comprehensive overview of trends and developments in South Africa’s telecommunications market. Subjects covered include:

  • Key statistics;
  • Market and industry overviews;
  • Regulatory environment and structural reform;
  • Major players (fixed, mobile and broadband);
  • Infrastructure development;
  • Mobile voice and data markets, including 3G;
  • Internet development;
  • Broadband, including 3G mobile;
  • Convergence (voice/data, fixed/wireless/mobile);
  • Digital Media.


South Africa’s telecom sector boasts the continent’s most advanced networks in terms of technology deployed and services provided. Following years of delays with its licensing, the second national operator (SNO) Neotel has finally launched services in competition with Telkom SA and is gaining traction in the market. This, in combination with other sweeping liberalisation measures - also delayed by years - is beginning to change the country’s telecoms landscape fundamentally and bringing prices down.

  Under the new regulatory regime, hundreds of alternative service providers are now pushing into the market with converged services. There has been consolidation in the sector which is expected to continue. Key regulatory events shaping the market in 2010/11 will be the auctioning of WiMAX spectrum and the unbundling of the local loop (ULL, or LLU).

  The country has a vibrant mobile market that has seen rapid uptake since competition was introduced 15 years ago. With market penetration above 100% and number portability available, the network operators - Vodacom, MTN, Cell C and Telkom SA - are increasingly forced to find innovative ways of distinguishing themselves from the competition in order to gain and retain customers. While emerging as the country’s leading broadband providers, the major mobile operators are also aggressively entering the fixed-line market in a rapidly converging environment.  

In addition, the government has created Broadband InfraCo, a national infrastructure company to provide cheap backbone network capacity to service providers. Despite the significantly increased competition between different service providers, many municipalities in South Africa, including the country’s largest cities, are implementing their own fibre and wireless broadband networks.

  The arrival of Seacom as the second international submarine fibre optic cable in South Africa 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. Several other cables are scheduled to go live in 2010 and 2011.

  South Africa’s Internet and Broadband market is finally taking off after years of stagnation due to the expensive operating environment created by Telkom SA’s dominance in the fixed-line and international bandwidth market. Wireless broadband, including WiMAX and 3G/HSDPA mobile data services now rival available ADSL offerings in terms of both speed and price, and consequently subscriber numbers. With its fixed-line network reaching less than 10% of the population, the incumbent has reacted by launching its own 3G network and the country’s first commercial WiMAX service, but various competitors are hard on its heels rolling out the same technology, including second national operator Neotel.  

South Africa is also taking a regional lead role in the convergence of telecommunication and information technologies with the media and entertainment sector, promising reductions in telecommunication costs and better availability of information and services. Billions of dollars are being invested into IP-based NGN that are capable of delivering converged services more efficiently.

  Telecom carriers and ISPs are moving into delivering audio and video content over their networks, while in turn the traditional electronic media carriers are discovering the potential of their infrastructure for telecommunications service delivery. Digital media and social media have reached a level of development to foster an associated advertising and marketing industry.

Market highlights:

  • 2010 estimates for mobile, fixed-line, Internet and broadband market;
  • Mobile penetration has broken the 100% barrier;
  • Decreasing ARPU and increasing churn;
  • More 3G mobile broadband than DSL subscribers;
  • New international fibre links;
  • Profiles of major players in all market sectors;
  • 2009 financial results;
  • Online advertising is growing at the fastest rate among all English-speaking countries in the world;
  • More Twitter users than Japan, China, Spain and the Netherlands.
  Vodacom South Africa subscribers and market share - 2008 - 2009
Year Subscribers (million) Market share
2008 24.1 51%
2009 (Sep) 28.2 55%
(Source: BuddeComm based on Global Mobile, company and industry data)

  For those needing high level strategic information and objective analysis on the telecommunications sector in South Africa, this report is essential reading and gives further information on:
  • Government policies affecting the telecoms industry;
  • Market liberalisation and regulatory issues;
  • Telecoms operators - privatisation, acquisitions, new licences and competition;
  • Internet and broadband development and growth;
  • National and municipal fibre rollouts;
  • 3G mobile broadband rollouts and market shares;
  • Broadband pricing, fixed and mobile;
  • Average revenue per user (ARPU) and churn.
  Data in this report is the latest available at the time of preparation and may not be for the current year.

1. Key Statistics
2. Telecommunications Market
2.1 Overview
2.1.1 Fixed-line market
2.1.2 Mobile market
2.1.3 Broadband and Internet market
2.1.4 Convergence and digital media
3. Regulatory Environment
3.1 Historical background
3.1.1 Network rollout obligations
3.2 Regulatory authority
3.2.1 Independent Communications Authority of South Africa (ICASA)
3.3 Telecommunications Amendment Bill
3.4 Regulation of Interception of Communications Act 2002
3.5 Electronic Communications Act and ICASA Amendment Bill
3.6 Converged licensing regime
3.7 New Companies Act
3.8 Universal Service and Access Fund (USAF)
3.9 Telecom sector liberalisation in South Africa
3.9.1 Overview
3.9.2 Privatisation of Telkom SA
3.9.3 Third mobile licence
3.9.4 Analysis of the SNO licensing process
3.9.5 Third fixed-line and fourth mobile licence
3.9.6 PTN licences
3.9.7 The ‘Big Bang’
3.9.8 Under-Serviced Area Licences (USALs)
3.9.9 Interconnection
3.9.10 Number Portability
3.9.11 Carrier pre-selection (CPS)
3.9.12 Local Loop Unbundling (LLU)
3.9.13 International gateways
3.9.14 International submarine cables
3.9.15 Spectrum licensing
3.9.16 Least Cost Routing (LCR)
3.9.17 Broadcasting licences 2007
3.9.18 Mobile TV licences 2010
4. Fixed Network Market
4.1 Market overview
4.2 Telkom SA Ltd
4.2.1 Shareholder structure
4.2.2 Business segments and services
4.2.3 Financial data
4.2.4 Telephone tariffs
4.2.5 Data services and leased lines
4.2.6 Global network services
4.2.7 ISDN
4.2.8 PBX
4.2.9 VSAT
4.2.10 International expansion
4.2.11 Structural separation
4.3 Neotel
4.3.1 Licence conditions
4.3.2 Shareholder structure and funding
4.3.3 Services and market potential
4.4 InfraCo
4.5 Amobia
4.6 Mobile operators establishing fixed networks
4.7 National private networks
4.7.1 Overview
4.7.2 Transtel
4.7.3 Eskom
4.7.4 Other electricity utilities
4.7.5 State IT Agency (SITA)
4.7.6 Sentech
5. Telecommunications Infrastructure
5.1 Telkom’s national telecom network
5.1.1 Fixed-line teledensity
5.1.2 Wireless Local Loop (WLL)
5.2 Neotel’s network infrastructure
5.3 Municipal networks
5.3.1 Knysna - Africa’s first municipal network
5.3.2 City of Tshwane
5.3.3 City of Johannesburg
5.3.4 Ekurhuleni (East Rand)
5.3.5 City of Cape Town
5.3.6 eThekwini (Durban)
5.3.7 Gauteng Link
5.4 Dark Fibre Africa
5.5 Internet Solutions (Dimension Data)
5.6 International infrastructure
5.6.1 Overview
5.6.2 Submarine fibre
5.6.3 South African Power Pool
5.6.4 Satellite
6. Internet Market
6.1 Overview
6.1.1 Internet statistics
6.2 Internet demographics
6.3 Community access projects
6.3.1 Microsoft Digital Villages and telecentres
6.3.2 The Smart Cape Access Project
6.3.3 Intel’s ‘World Ahead’ initiative
6.4 South Africa’s ISP market
6.4.1 Internet Service Providers Association (ISPA)
6.4.2 Selected major ISPs
6.5 VoIP telephony
6.5.1 Market overview
6.5.2 VoIP interconnection and peering
6.5.3 Major VoIP providers
6.5.4 Mobile VoIP
6.5.5 Call centres
6.6 Next Generation Networks (NGN)
6.6.1 Telkom SA
6.6.2 Neotel
6.6.3 Transtel
6.6.4 Eskom
6.6.5 SITA
6.7 IPTV, Triple Play
6.8 Broadcasting licences 2007
6.9 Broadcast signal distributors
6.9.1 Background
6.9.2 Sentech
6.9.3 Orbicom
7. Broadband Market
7.1 Overview
7.1.1 Broadband statistics
7.2 Asymmetrical Digital Subscriber Line (ADSL)
7.2.1 Major ADSL providers
7.2.2 ADSL tariffs
7.2.3 ADSL2+
7.2.4 ADSL wholesale
7.3 Wireless broadband
7.3.1 WiFi
7.3.2 WiMAX
7.3.3 EV-DO
7.3.4 Wireless Access Providers Association (WAPA)
7.3.5 MyWireless (Sentech)
7.3.6 iBurst (WBS, Blue Label)
7.4 3G mobile broadband
7.5 Broadband via satellite
7.6 Broadband over powerlines (BPL)
8. Digital Economy / Digital Media
8.1 Digital economy
8.1.1 E-learning
8.1.2 e-banking
8.1.3 Mobile banking (m-banking)
8.1.4 Electronic funds transfer at point of sale (EFTPOS)
8.1.5 Online gambling
8.2 Digital media
8.2.1 Broadcasting overview
8.2.2 Digital Terrestrial TV (DTTV)
8.2.3 Digital satellite TV
8.2.4 Mobile TV
8.2.5 High Definition TV (HDTV)
8.2.6 Video-on-Demand (VoD)
8.2.7 Personal video recorders (PVR)
8.2.8 Interactive TV (iTV)
8.2.9 Online retail
8.2.10 Online advertising
8.2.11 Online media
8.2.12 Social media
8.2.13 Mobizines
8.2.14 User Generated Content (UGC)
8.2.15 Search engines
9. Mobile Communications
9.1 Overview of South Africa’s mobile market
9.1.1 Mobile statistics
9.1.2 Market liberalisation and licence obligations
9.1.3 Community service telephones (CST)
9.1.4 Fixed-mobile convergence (FMC)
9.2 Regulatory issues
9.2.1 Prices
9.2.2 Interconnection
9.2.3 Handset subsidies
9.2.4 International gateways
9.2.5 Fees and obligations for 1800MHz spectrum
9.2.6 Registration of personal details
9.2.7 Mobile Number Portability (MNP)
9.2.8 Quality of service (QoS)
9.3 Mobile technologies
9.3.1 Low-cost handsets
9.4 Major mobile operators
9.4.1 Vodacom South Africa
9.4.2 MTN South Africa
9.4.3 Cell C
9.4.4 Mobile Virtual Network Operators (MVNO)
9.5 Mobile messaging
9.5.1 Short Message Service (SMS)
9.5.2 Multimedia Messaging Service (MMS)
9.6 Mobile data services
9.6.1 Overview
9.6.2 Mobile data revenue
9.6.3 Wireless Application Protocol (WAP)
9.6.4 General Packet Radio Service (GPRS)
9.6.5 Enhanced Data Rate for GSM Evolution (EDGE)
9.6.6 BlackBerry
9.7 Third Generation (3G)
9.7.1 3G broadband overview
9.7.2 Vodacom
9.7.3 MTN
9.7.4 Cell C
9.7.5 Telkom SA
9.8 Mobile content and applications
9.8.1 Push-to-Talk (PTT)
9.8.2 Mobile TV
9.8.3 Mobile music
9.8.4 CellBook
9.8.5 M-commerce
9.8.6 Mobile advertising
9.8.7 Location-based services (LBS)
9.8.8 Manobi
9.8.9 Mobile social media
10. Glossary of Abbreviations
Table 1 - Country statistics South Africa - 2010
Table 2 - Fixed-line network statistics - 2010
Table 3 - Internet provider statistics - 2010
Table 4 - Internet and broadband statistics - 2010
Table 5 - Mobile statistics - 2010
Table 6 - National telecommunications authorities
Table 7 - Telkom SA shareholders - March 2009
Table 8 - Telkom SA shareholders - March 2009
Table 9 - Telkom SA’s fixed line data revenue and annual change - 2002 - 2009
Table 10 - Telkom SA ISDN channels - 2000 - 2009
Table 11 - Fixed lines in service and teledensity - 1999 - 2010
Table 12 - Internet users and penetration rate - 1995 - 2010
Table 13 - Broadband subscribers - 2004 - 2010
Table 14 - Broadband subscribers by service provider - March 2008
Table 15 - Telkom ADSL subscribers - 2003 - 2009
Table 16 - WAPA industry survey - 2006 - 2008
Table 17 - Sentech MyWireless subscribers - 2005 - 2008
Table 18 - iBurst subscribers - 2005 - 2008
Table 19 - Online advertising revenue and annual change in South Africa - 2003; 2006 - 2009
Table 20 - Mobile subscribers and penetration rate - 1994 - 2010
Table 21 - Mobile subscribers by operator, technology and market share - March 2009
Table 22 - Vodacom South Africa subscribers and market share - 2002 - 2009
Table 23 - Vodacom South Africa key statistics - September 2009
Table 24 - MTN South Africa subscribers and market share - 2002 - 2009
Table 25 - MTN South Africa key statistics - September 2009
Table 26 - Vodacom active 3G/HSDPA broadband users - 2006 - 2009
Exhibit 1 - VANS - to self-provide or not to self-provide
Exhibit 2 - First round USAL licence holders
Exhibit 3 - Second round USAL licence holders
Exhibit 4 - Large ISPA members - February 2010
Exhibit 5 - Spotlight on Vodacom GSM community payphones

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