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South Africa Telecommunications Report Q3 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: June 2009 Product Code: R302-6555 Description BMI’s latest update on the South African telecoms market contains newly revised forecasts for thecountry’s fixed-line and mobile telephony markets. Our new mobile subscriber forecast is based on thelatest data published by the country’s two leading mobile network operators, Vodacom and MTN.Meanwhile, we have adjusted our fixed-line forecast for South Africa to account for the latestdevelopments in that market segment.Based on the latest available data, we estimate that there were just over 49.9mn mobile telephonycustomers in South Africa at the end of 2008. This meant that the market grew by 13.3% in 2008, givingthe country a mobile penetration rate of 103% at the end of the year. Actual growth in 2008 was lowerthan the 17.5% growth rate we previously envisaged. This means that we have downwardly revised ourgrowth expectations for 2009 and beyond. Meanwhile, our new estimate for the total number of fixed lines in South Africa at the end of 2008 takesinto account the fixed-line customers of ‘second national operator’ Neotel, which began offering fixedwireless-based fixed-line services in 2008. Our new estimate for the number of fixed lines in South Africagives the country a fixed-line penetration rate of 9.3% at the end of 2008. We predict that South Africa’sfixed-line market will continue to feel the effects of continued mobile substitution and the proliferation ofVoIP services, with the development of such services expected to have a negative impact on fixed-linegrowth. However, in the medium term, we predict that the proliferation of fixed wireless services offeredby Neotel will help to mitigate the rapid decline of the sector. Recent developments in South Africa’s telecoms market include the March 2009 news that mobileoperator Vodacom had joined forces with MTN and Neotel to construct a 5,000km national, fibre-opticnetwork. The fibre-optic network will provide the three companies with additional bandwidth capacityand enable them to bypass the infrastructure of fixed-line incumbent Telkom SA. Also in March, Neotel announced that it had become the ‘anchor tenant’ on the SEACOM internationalsubmarine cable, via a deal struck by its parent company, Tata Communications. The deal will enableNeotel to act as manager of the cable's South African landing station in Mtunzini. The SEACOM cablesystem is due to become active in June 2009. South Africa continues to sit in fifth place in BMI’s latest set of Business Environment Rankings forAfrica. This is in spite of several changes to the country’s individual ratings scores. This quarter has seena notable increase for South Africa’s telecoms market score. Meanwhile, this quarter sees a majorslippage for South Africa’s Country Risk rating, a development which reflects our concern abouteconomic slowdown. Table of Contents
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