Broadband is expected to be one of the major themes in the year ahead, boding well for corporate end users and suppliers alike.
Johannesburg-based Microsoft gold-certified partner Mint expects broadband speeds to have increased exponentially by year-end.
MD Grant Hodgkinson also expects price reductions, making the provision of broadband more cost-effective for companies with a branch structure. This is a macro trend that Mint aims to benefit from, he says.
Mint is not the only company that aims to benefit from increased broadband penetration. One analyst, who spoke on condition of anonymity, pegged supply-side providers to the broadband industry as having scope for growth.
He said that as SA drives towards broadband this year, those supplying the nuts and bolts for infrastructure rollout could do well. Another analyst commented that, locally, there is space for quite a few more broadband operators.
"There are not that many credible broadband operators in SA."
He said that Telkom is expected to become more aggressive in its broadband strategy, and will also intensify its moves on the continent.
Expansion moves
A Ugandan paper has reported that the fixed-line operator is buying a stake in Ucom, a consortium that owns 51% of Uganda Telecom. The two entities are believed to be negotiating price and have already completed due-diligence aspects of the deal.
The Ugandan government owns the balance of the telecoms company, which has about 500 000 mobile phone subscribers and about 100 000 fixed-line subscribers.
Telkom's move comes amid speculation that telecoms companies on the continent will consolidate or risk falling behind. The market also expects to see regionalised tariffs on the continent this year.
In SA, Telkom is expected to accelerate its quarterly net broadband additions as it intensifies its rollout, while tariffs are expected to decline.
Telkom's mobile arm, Vodacom, 50%-owned by the fixed-line operator, is expected to have a busy year. Already, the company has made a move on 10% of wireless provider iBurst and has nominated countries for its African expansion plan.
The analyst said that iBurst is currently performing well, and is expected to gain market share, while Sentech seems to have stagnated over the last 18 months.
Solid year ahead
Overall, local ICT firms are expected to have a good year in 2007. Neither analyst expects to see any companies failing as a result of SA's current solid economic climate.
IT companies listed on the JSE's main board have seen their share prices tick up recently on the back of good fundamentals and can no longer be viewed as bargain buys, commented one analyst.
While companies are not "massively expensive", there is not much surplus value to be had, he says, in comparison to share prices at the same time a year ago. This year has already seen the JSE hit an all-time record in its all share value.
Most shares are currently trading at either fair value, or just below that, he says. A year ago, JSE-listed ICT firms were trading at a 30% to 40% discount on fair value.
"The economy is doing well, and companies need to spend on their IT systems, so the outlook is solid."
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