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South Africa Telecommunications Report Q4 2012 - New Market Report Now Available

Fast Market Research recommends "South Africa Telecommunications Report Q4 2012" from Business Monitor International, now available


Boston, MA -- (SBWIRE) -- 12/22/2012 -- South Africa's mobile sector continues to record strong subscriber growth despite a penetration rate of around 135% at the end of Q112, according to BMI data. We expect this trend to continue in the medium term as intense competition between the operators results in wider network coverage and lower tariffs. We also retain a positive outlook for the internet sector as considerable investments in wireless and wireline access technologies, as well as submarine and terrestrial cable networks, are set to drive growth. However, the contraction of the fixed-line sector could persist with increasing fixed-to-mobile substitution and limited competition in that sector.

Key Data

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- Mobile growth was boosted in Q112 by the introduction of low tariffs by operators. The market grew by 6.1% q-o-q in Q112, compared to 4.1% in the same period in 2011.
- Blended market weighted average ARPU fell by 1.7% q-o-q and 7.3% y-o-y as operators' promotional activities eroded their ARPUs.
- The contraction of the fixed-line sector continues unabated with the incumbent operator Telkom SA reporting a 3.8% decrease in active subscriptions in the 12 months to March 2012.
- Growth in the broadband sector is driven by the expansion of 3G networks, as demonstrated by mobile market leader Vodacom, which added 975 3G base stations in the 12 months to March 2012.

Risk/Reward Ratings

South Africa retains top position on BMI's telecoms Risk/Reward Ratings for Sub-Saharan Africa. Although the country's aggregate score fell by 1.5ppts to 57.4 this quarter, it is considerably higher than the regional average of 41.7. South Africa's highest score is in the Country Risks category, which reflects a stable political environment and economic growth, albeit it at a slower rate than the regional average.

Key Trends & Developments

Incumbent operator Telkom SA intends to sign deals with retail and technology firms to make its services easier to reach for customers. This strategy will see the operator form partnerships with firms in order to occupy space in retail channels, which are a vital location for customer purchases. Telkom previously signed a deal with Samsung, making it easier for customers to sign up for the firm's broadband services when purchasing a smart TV.

Local media remain awash with rumours of Telkom's nationalisation despite multiple denials by the government. These claims follow the government's rejection of South Korea-based KT Group's attempt to acquire 20% of the incumbent operator. Reasons for nationalisation of the operator could include developing the firm without the pressures of a flotation, and of the regulations imposed by ownership through the Johannesburg stock exchange. South African unions, including the Communication Workers Union (CWU), strongly favour nationalisation.

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