Addis Ababa, Ethiopia - Huge investments are expected to take place in South Africa over the next five years with the recent arrival of LTE services, as well as the upcoming BRICS and ACE undersea cables, raising the tide for revenue streams from data services, according to a new report from Pyramid Research.
The report, ‘South Africa: LTE Rollouts, Network Investments and Undersea Cables to Boost Competition and Revenue’, which was released Wednesday, offers a precise profile of the country's telecommunications, media and technology sectors based on proprietary data from Pyramid's research in the market.
It provides a detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services and monitors the introduction and spread of new technologies.
“South Africa has begun initiatives to invest in technology and infrastructure,” said Ousmane Yatera, analyst at Pyramid Research.
The landing of the undersea cable WACS (West African Cable System) is one of several projects expected to double South Africa’s broadband capacity while the upcoming BRICS and ACE cables will also contribute on this front.
“These steps will strengthen the country’s data backbone and will improve the offering of broadband Internet and data-related services,” Yatera continued.
“Equally, operators are now looking to expand their 3G and 4G networks all over the country.
“Vodacom has already committed to increasing its investment of 13 percent to 17 percent for the next few years to reach 100 percent 3G coverage in rural areas and to grow its LTE 4G network,” he added.
According to the report, South Africa’s telecoms market revenue is expected to grow at a CAGR of 2 percent over the forecast period, from estimated US$ 14.4 billion in 2013 to US$ 16.1 billion in 2018.
Mobile communications was once again the dominant telecoms sector in 2013, generating US$ 10.2 billion.
“However, as market players get pulled into aggressive price wars with further cuts in mobile termination rates, we expect voice revenue to decline at a compound rate of -2 percent over the forecast period,” the report said.
The biggest declines would come in dial-up internet, which is expected to be dwarfed by broadband internet following recent and expected activations of new submarine cables.