Fixed line penetration is estimated at 10%, while mobile penetration is significantly higher at around 93%, according to figures from the Department of Trade and Industry.

The estimated revenue generated in the telecommunications sector during 2007 was R126-billion, and telecommunications (hardware and software) contributed an estimated additional R27-billion.

Telkom, a listed company in which the government is the biggest shareholder, was until recently the only licensed provider of public fixed-line telecommunications services. Telkom is also a key player in an optical fibre undersea cable project that will cater for Africa’s growing telecommunications needs for the next 25 years.

But the market is opening up rapidly. In late 2006, the government awarded Neotel a licence to become the second fixed-line operator. The new company is expected to challenge Telkom with competitive prices and has been gradually rolling out its services during 2007.

A court ruling in 2009 had added impetus, allowing value added network service providers – of which there are about 300 in South Africa – to build their own networks. A second transatlantic cable, Seacom, is expected to land in mid-2009.

South Africa’s cellular phone market has grown consistently – and phenomenally – since its inception in 1994. It is the fourth-fastest growing mobile communications market in the world, recording more than 44-million subscribers in 2007.

Cellular services are provided by three licensed operators: Vodacom, MTN and Cell C, which also operates in partnership with Virgin Mobile.

South Africa is also the largest Internet market in South Africa, with an estimated 4.6- to 5.4-million users. There are still around 700 000 dial-up users, while there were 1.35-million broadband connections at the end of 2008. Research firm World Wide Worx predicts that South Africa will show steady Internet user growth over the next few years, reaching 8.5-million Internet users in 2013 and 9-million users in 2014.
According to the Economist Intelligence Unit’s Information Industry Competitiveness Index 2008, South Africa ranks 37th out of 66 countries reviewed, owing to well-established business and legal sectors.

Useful links

• Economist Intelligence Unit’s Information Industry Competitiveness Index 2008
• World Wide Worx
• Telkom
• Neotel

SOURCE
Image: Mobile communication has transformed South Africa’s telecommunications sector.
Photo: Graeme Williams, MediaClubSouthAfrica.com