South Africa: Network Investment, FTTx Deployment and Regulatory Initiatives to Drive Competition and Growth

Summary In 2015, South Africa will generate estimated telecom revenue of $12.2bn. Over the next five years, Pyramid Research expects total market revenue in South Africa to decrease at a CAGR of -1.5% in dollar terms to reach $11.3bn in 2020. Currency exchange rate volatility will adversely impact revenue growth over the forecast period. Nevertheless, we believe South Africa still has much potential for growth following planned investment in LTE network coverage and expected undersea cables. By 2020, we expect voice services to contribute 14 percentage points less to overall revenue. Data will emerge as the fastest-growing segment, its share of total revenue going from 30.6% in 2015 to 42.0% in 2020. The proliferation of smartphones over the past few years has strongly contributed to boosting data revenue. Key Findings In 2015 South Africa will generate estimated revenue of US$12.2bn, 4.8% less than the previous year in dollar terms. Mobile is the dominant segment, generating $9.0bn in 2015. However, we expect mobile voice revenue will decrease at a CAGR of -6.6% in dollar terms over the next five years due to competition and MTR cuts. Pyramid Research expects to see overall service revenue decline at a -1.5% CAGR from 2015 to 2020. Gradual rand depreciation will affect revenue growth prospects over the forecast period. In local currency, we expect overall service revenue to grow at a compound rate of 2.1% over the next five years. The fixed/mobile revenue split will remain stable over the forecast period. Over the next five years, operators should seize opportunities in multiplay offers and IPTV services. Vendors have an opportunity to support operators in the expansion of network coverage over the near term. Synopsis South Africa: Network Investment, FTTx Deployment and Regulatory Initiatives to Drive Competition and Growth” provides an executive-level overview of the telecommunications market in South Africa today, with detailed forecasts of key indicators up to 2020. It delivers deep quantitative and qualitative insight into the telecom market of South Africa, analyzing key trends, evaluating near-term opportunities and assessing risk factors, based on proprietary data from Pyramid Research's databases. It provides in-depth analysis of the following: South Africa in a regional context; a comparative review of market size and trends with that of other countries in the region. Economic, demographic and political context in South Africa. The regulatory environment and trends; a review of the regulatory setting and agenda for the next 18-24 months as well as relevant developments pertaining to spectrum licensing, national broadband plans and more. A demand profile; analysis as well as forecasts and historical figures of service revenue from fixed telephony, broadband, mobile voice, data and pay-TV markets. Service evolution; a look at the change in the breakdown of overall revenue by fixed, pay-TV and mobile sectors and by voice, data and video in the current year as well as the end of the forecast period. An in-depth sector analysis of fixed telephony and broadband services, mobile voice, data services and pay-TV; a quantitative analysis of service adoption trends by technology/platform as well as operator, average revenue per line/subscription and service revenue through the end of the forecast period. Main opportunities; this section details the near-term opportunities for operators, vendors and investors in the telecommunications market in South Africa. Reasons To Buy Provides an overview of the South Africa telecom market through a combination of quantitative and qualitative insights. The graphical information consists of more than 20 charts and tables derived from Pyramid Research's forecast products. Build profitable growth strategies by leveraging the analysis, which includes an examination of current player strategies and the future trends of the South Africa telecommunications market. Understand the factors behind ongoing and upcoming trends in South Africa's mobile communications, fixed telephony, broadband and pay-TV markets, including the evolution of service provider market shares, to align product offerings and strategies to meet customer demand. Gain insights on key telecom players in the market and their strategies to grow market share. Explore novel opportunities to align your product strategies and offerings to meet customer requirements and succeed in the challenging telecommunications market in South Africa.