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SA lags on multiple-play

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 25 Mar 2008

While SA's multiple-play market in gated communities is still in its infancy, the total potential revenue for supplying such services to both new and existing estates by 2012 is R1.3 billion, says BMI-TechKnowledge (BMI-T).

BMI-T recently reviewed the global trend to provide multiple-play services, such as broadband Internet access, security/CCTV monitoring systems, pay TV and video-on-demand, in gated communities.

The report, titled "Multiple play opportunities in the gated communities market", found the South African multiple-play market was constrained by local property developers' reluctance to invest heavily in rolling out infrastructure, as well as regulatory and logistical challenges.

"Developers tend to be wary of new trends and the costs involved," says BMI-T senior analyst and reports author Cal Falconer.

Falconer adds that local developers also lack the mindset to get involved in the networking business. As a result, the installation of networks in gated communities and the sale of corresponding services were not high on their list of priorities, she says.

Established estates also face regulatory and logistical issues in terms of new players connecting them with fibre, says Falconer.

According to the Electronic Communications Act 36 of 2005, a person/company needs an appropriate private telecoms network licence before it is able to render a communications service.

This means that property developers wishing to provide networks in a private estate must have an electronic communications network service licence or partner with a company that has a licence.

Strong potential

Despite these challenges, ICT industry players see an escalating need by established estates for access to multiple-play services, through xDSL, fibre or even power-line or wireless solutions, says Falconer.

As consumer demand for multiple-play services in gated estates increases, so developers will need to change their mindset and begin incorporating such technologies and corresponding services into their developments from day one of the project, she says.

Some of this will be seen as communication providers, such as MultiChoice, Vodacom, MTN and Telkom Media, Neotel and emerging telecoms providers, invest in this space, Falconer says.

"The year 2008 should see plenty of movement in the multiple-play market as these telecoms providers set up partnerships, or acquire companies to complement their own services and complete the multiple-play offering."

Far-sighted and ingenious suppliers, who encourage property developers to invest in broadband infrastructure, can also drive the growth of the market, says Faconer.

"Developers who have deployed networks are likely to differentiate their properties on this basis," she says.

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