Telecommunications
• MTN and Neotel are joining forces to lay a 5 000km fibre-optic cable nationwide
The most exciting news in 2009 for all South African telecommunications users was the landing of the Seacom cable. This event delivers on the long-awaited promise of expanded bandwidth at a far cheaper cost than before. Cables are being laid all over South Africa in anticipation of the new service being rolled out. Broadband access is expected to grow by 33% every year for the next five years.
The anchor tenant of the Seacom cable is Neotel, South Africa’s second national operator (SNO). Previously Telkom had a monopoly. In another interesting development in 2009, Neotel announced that it would team up with cellphone company MTN to lay a 5 000km fibre- optic cable to all of South Africa’s bigger cities at a cost of R2-billion. This will give both companies a chance to compete more strongly with Telkom and Vodacom.
The mobile revolution continues in South Africa as still more consumers opt for mobile phones over the more traditional fixed-line option. A Statistics SA survey on telecommunications in South Africa in 2007 showed that between 2001 and 2007, mobilephone ownership had grown from 32.3% to 72.9%, while fixed-line ownership had shown a significant decrease. In 2007 alone the number of Telkom fixed-lines dropped by 110 000, a trend the national utility has been unable to reverse in recent years. This trend is partly due to the move to mobile technology, but also a result of the continued growth of Neotel, which was launched in direct competition to Telkom in 2006. While regions of rural Mpumalanga remain at the far outpost of what telecommunications providers can reach, most of Mpumalanga is well connected and supportive of good business.
The mobile market in South Africa is dominated by Vodacom, MTN and Cell C. In June 2006, Virgin Mobile came on stream, but still trails the established big names significantly, despite excellent recent growth.
One of the main reasons for the popularity of mobile connectivity in South Africa is that a large number of South Africans live outside of areas reliably serviced by fixed-line operators. Combined with the obvious convenience, and the prepaid billing system, it becomes clear why mobile telecommunication is so popular in South Africa. The majority of South Africans prefer prepaid, but 2007 saw for the first time contract usage outgrow prepaid.This is perhaps an indication that mobile usage in business is becoming more frequent, a consequence of reduced cost and improved reliability.
KEY CONTACTS
Communications Users Association
of South Africa:
www.cuasa.org.za
Independent Communications Authority of
South Africa: www.icasa.org.za
Neotel: www.neotel.co.za
Telkom: www.telkom.co.za
