The Telecommunications Industry and Retail of Devices
South African telecommunications operators experienced positive, if muted, growth in 2018 as total subscriptions, device ownership, internet penetration, and data usage continue to increase. The South African telecommunications sector grew by over 14% and was worth R187bn in 2018. Mobile subscriptions, device ownership, and internet penetration continues to grow and the majority of service revenue growth is due to double-digit increases in the value of data. South Africa’s fibre and data centre markets are expanding rapidly.
Telecoms companies are having to adapt to widespread disruption; the structural shift from voice to data is undermining traditional margins, and increases in data traffic are being offset by a proportional decline in effective data prices. The market is maturing and operators are having to compete to grow their share of the prepaid and lower-income markets, from which the majority of future growth is expected to come. Investment in the sector is highly influenced by South Africa’s poor economic growth, regulatory changes and technological developments.
This report focuses on the South African telecommunications industry and the market for mobile devices. While the sector formally includes broadcasting and postal services, this report emphasises telephony, internet and mobile broadband, and the relevant supporting infrastructure. It examines investment, turnover and market share of major players, both local and international, and the influence of various factors including economic activity, lack of spectrum, high data prices, environmental concerns, electricity supply and competition. There are comprehensive profiles of 56 companies including Telkom, which dominates fixed-line telephony, and Vodacom and MTN, which dominate the mobile space. Other profiled companies include Cell C and Virgin Mobile, and fibre companies such as Vumatel, Vox and Dark Fibre.