South Africa pulls itself out of a market slump

South Africa's mobile market leaders, Vodacom and MTN, are experiencing an impressive comeback following a massive loss of mobile customers in H209 and H110...

New research from BMI suggests that South Africa's mobile market leaders, Vodacom and MTN, are experiencing an impressive comeback following a massive loss of mobile customers in H209 and H110. Based on the strong performance for Vodacom and MTN, which account for 85% of the South African mobile market, the country's mobile customer base will reach roughly 56.6mn customers at the end of 2011 (equivalent to a penetration rate of 113%) and 66.6mn mobile customers at the end of 2015.

This should result in South Africa having a mobile penetration rate of more than 127%. In July 2011 South Africa's Department of Communications suggested more than 99% of the country's mobile customers had been registered under SIM registration legislation. The deadline for users to register their SIM cards was midnight on June 30 2011. Considering South Africa's high mobile market penetration rate (105% at end of 2010) the continuation of strong customer growth, despite the implementation of a strict SIM registration policy, suggests SIM registration itself does not preclude the existence of multiple SIM owners. New customer figures published by Telkom for its mobile business 8ta show the number of registered customers can remain much higher than the number of active customers even after SIM registration has been introduced.

Recent noteworthy developments in South Africa's telecoms sector include the news that Virgin Mobile launched its own mobile broadband service using Cell C's HSPA+ network, Cell C. South Africa's only MVNO confirmed the launch of the new data service in July. In addition to increasing competition, the introduction of lower cost services will likely drive growth in the mobile broadband sector. In July 2011, Cell C announced a new deal which includes a phone, 100 off-peak minutes and a 7.2Mbps 2GB USB dongle deal for under ZAR150 a month. During recent months there has been a wave of promotions and price cuts in the mobile broadband market, which included the launch of promotions by Vodacom and MTN, offering 2GB of data for ZAR149 a month. Growing competition in the mobile data market has also resulted in Telkom's 8ta mobile business launching a 10GB data package for ZAR199. Increasingly, it appears that the operators are competing head-on for mobile broadband customers.

Other noteworthy developments in South Africa include the news that WACS (West Africa Cable System) landed in Yzerfontein, near Cape Town. It appears that the start of commercial service will be in Q112. Once operational, WACS will run a 14,000km 3,840GB cable from South Africa to the UK with links to at least 10 African countries. The total capacity of the system is 5.12Tbps and at least 500Gbps will be lit at launch. The South African government suggested WACS would enable broadband access costs to fall to less than ZAR100 a month for up to 5GB of high-speed downloads.

MORE ARTICLES YOU MAY BE INTERESTED IN...


Sign-up to our weekly newsletter

Keep up-to-date with all the latest news, articles, event and product updates posted on Developing Telecoms.
Subscribe to our FREE weekly email newsletters for the latest telecom info in developing and emerging markets globally.
Sending occasional e-mail from 3rd parties about industry white papers, online and live events relevant to subscribers helps us fund this website and free weekly newsletter. We never sell your personal data. Click here to view our privacy policy.