Boston, MA -- (SBWire) -- 07/13/2013 --The South African telecoms regulator ICASA recently cut mobile termination rates (MTRs). This regulatory move means small operators will no longer benefit from lower tariffs when completing calls on the networks of their bigger rivals. This could make lower tariffs charged by some of the smaller operators unsustainable in the long term, and force them to revise their strategies. With voice revenues declining and a market approaching saturation, operators will focus on developing data services to maintain ARPUs over the coming five years. Cell C has kept up with the trend and begun building its LTE network in order to compete with MTN and Vodacom in the high value data market.
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Key Data
- Restated figures from MTN and Cell C led us to revise down our year-end figures for 2012, to 68.35mn subscribers. We estimate the market will continue to grow relatively quickly in 2013, to 73.5mn subscribers.
- Telkom has not yet released data for FY2013, though, based on recent trends, we maintain our expectation that the fixed-line market fell below 4mn subscribers at the end of 2012, and will continue to decline over our five-year forecast period to 2017.
- MTN and Vodacom both reported declining ARPUs in 2012, and we estimate ARPUs for 2012 at ZAR108, down from ZAR116 in 2011. As fits with our five-year forecast, decline in ARPUs is beginning to slow down.
Risk/Reward Ratings
South Africa remains in second position behind Nigeria in the quarter for our Risk/Reward Ratings in Q313, with an aggregate score of 55.1. South Africa remains the region's largest economy and operators boast a healthier subscriber mix than much of the rest of the region, keeping its scores above the regional average. However, its more mature mobile market means that growth prospects are slower than many of its neighbours and we expect operators to increasingly focus on high-value services, such as mobile data.
Key Trends & Developments
- Neotel launched a mobile smart landline product, aimed at businesses to allow customers to take advantage of lower priced fixed voice calls when using the CDMA network. The service uses a dual SIM HTC smartphone, which enables customers to connect to the mobile GSMA network as well as the CDMA fixed-wireless service
- South Africa's shared broadband infrastructure firm Dark Fibre Africa (DFA) posted a 41.1% increase in revenue to ZAR302mn (US$32.55mn) during the six-month period ended December 2012. As of the end of 2012, DFA held fibre network rings in 6 major cities and 15 smaller towns throughout the country.
- Telkom Mobile announced that it will deploy free, unlimited Wi-Fi at over 400 hotspots throughout South Africa to users on qualifying tariffs. Prepaid and top-up subscribers will also be allocated free Wi- Fi access for seven days or 30 days when they recharge with airtime.
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South Africa Telecommunications Report Q3 2013 - New Study Released
Fast Market Research recommends "South Africa Telecommunications Report Q3 2013" from Business Monitor International, now available