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Sector Overview - Telecommunications (Wireless)
Mobile Voice and Data Dominate, Reflecting Evolving Consumer Needs
By Shumirai Chimombe
The South African telecom market revenue is expected at a CAGR of 5.32% over the next five years. Due to emerging technology (including artificial intelligence and the internet of things) and the COVID-19 pandemic, data requirements have recently increased particularly swiftly Mordor Intelligence
Mobile lines dominate the telecommunications space, accounting for almost two-thirds of income for the sector according to StatsSA. In 2022 mobile voice and data were the largest contributors to mobile lines, with SMS services showing a decline of 24% per annum, the second largest decrease in the sector. ADSL, which had been the largest generator of income in the internet access services category in 2019 declined sharply to third place. It was replaced by fibre-optic broadband which expanded by more than three-fold - a reflection of the changes in user trends and demand for services such as e-commerce, and smooth uploading and downloading of videos, podcasts, images and other information without interruptions. Voice services (fixed and mobile), line rental, interconnection services and satellite-provide services also recorded decreases in this period.
Stronger results were recorded for items related to the transmission and consumption of data, including fixed line data, fibre-optic broadband, mobile data, content subscription and data transmission services.
According to the Telecommunications in South Africa Industry Report by Mordor Intelligence, the surge in demand for data is credited to the country’s efforts in enhancing its telecommunications infrastructure, notably through 4G and 5G network expansions. The mobile segment is transforming, with an increase in smartphone subscriptions driven by telecommunications companies offering diverse data and voice packages. These companies are also evolving in a competitive landscape, aiming to improve service delivery and extend coverage, aligning with national objectives to elevate broadband speeds and accessibility, and fostering a digitally inclusive society.
Recently, the country’s emphasis has been on fiber and LTE networks and backup capacity to increase and improve internet service connectivity. Notably, as a result of the limited availability and poor quality of fixed-line networks, which left many people with no choice but to use mobile networks for voice and data services, the mobile industry has experienced rapid growth in recent years.
The South African telecom market is expected to grow on the back of LTE/LTE-A and 5G connectivity. This is especially true now that the government has announced that it will shut down 2G and 3G networks over the next three years. Several roaming agreements in the market will further support development in the cellular sector allowing the operators to use the extra airwaves to increase the size and extent of their coverage.
Roll Out Of 5G Propels SA's Fourth Industrial Revolution
5G is essential for the major digital platform ecosystems to drive South Africa’s fourth industrial revolution. The major mobile network carriers have already installed 5G networks to satisfy the country’s huge rise in traffic for internet services. The Independent Communications Authority of South Africa (ICASA) concluded an auction of spectrum in the 700MHz, 800MHz, 2.6GHz, and 3.5GHz frequency bands for 5G services, in which all operators actively participated. According to the auction’s rules, operators must reach population coverage of up to 80% to 97% within five years.
Source: Post and telecommunication
South Africa Telecom Market Size (2024 - 2029)
The telecommunications market size in South Africa is poised for growth, driven by increased demand for advanced connectivity solutions such as LTE and 5G. The transition from copper to fiber networks and the government’s initiatives to enhance broadband infrastructure are pivotal in this expansion. Despite challenges posed by the pandemic and macroeconomic disruptions, the market has shown resilience, with a notable shift towards mobile networks due to limited fixed-line options. The recent spectrum auctions and regulatory advancements further underscore the country’s commitment to maximizing the economic potential of its telecom sector, ensuring it remains competitive in the digital age.
Source: https://www.mordorintelligence.com/industryreports/south-africa-telecom-market/market-size
Wide Wireless Penetration Increases Digital Inclusion Im The Economy
Smartphones continue to rule the market as they quickly replace feature phones. The mobile connection has the potential to accelerate the digital transformation of the country and drive socioeconomic development, reports Mordor Intelligence. Africa is indeed experiencing a mobile phone revolution. With more than 100 million subscribers
South Africa is the largest mobile phone market in Africa, thanks to its expanding economy. Following South Africa are Nigeria, Egypt, and Morocco. In the following five years, mobile phone sales in the country are expected to more than double. The growth of local and regional economies and the expansion of service providers’ networks in the area are anticipated to support the increase.
According to ICASA research, the most popular choice for mobile voice services in South Africa is unquestionably prepaid subscriptions, making up more than 84% of all cellular voice subscriptions for mobile devices.
The great switch: fibre optic broadband overtakes ADSL
South Africa Telecom Market Size Summary
The telecommunications industry in South Africa is experiencing significant growth, driven by the increasing demand for advanced connectivity solutions such as fiber, LTE, and 5G networks. The market is undergoing a transformation as the government and major telecom operators focus on enhancing internet service connectivity and expanding mobile network coverage.
The transition from copper to fiber networks is a key trend, with Telkom leading the charge by phasing out its copper network. The rapid growth of the mobile industry is attributed to the limited availability and quality of fixed-line networks, prompting a shift towards mobile networks for voice and data services. The recent spectrum auction has further bolstered the market, enabling operators to expand their coverage and improve service quality, particularly in underserved areas.
Digital transformation is a central theme in South Africa’s telecom sector, with significant efforts underway to improve 5G legislation and regulations. The rollout of 5G infrastructure is seen as crucial for driving the country’s fourth industrial revolution, with major carriers investing in network expansion to meet the rising demand for internet services. The government’s initiatives to expedite spectrum auctions and allocate new bands are expected to enhance the capacity and speed of 5G networks, facilitating economic recovery and digital transformation.
The market is moderately fragmented, with key players actively participating in network expansion and digital solution offerings, aiming to leverage mobile connectivity for socio-economic development and improved service delivery.
Sources: https://www.mordorintelligence.com/industryreports/south-africa-telecom-market/market-size
