The South African mobile market is expected to continue to grow, reaching about 31 million subscribers by the end of 2009. Interestingly, the majority of handsets on the network will be GPRS and enhanced data GSM environment (Edge) enabled, with roughly 4.4 million handsets 3G WCDMA enabled.
Niche technologies such as TD‑CDMA, CDMA2000 and WiMAX will also to be available in handsets from 2007, BMI-T anticipates.
This wireless Internet and data drive by the mobile network operators will create an additional dynamic in terms of fixed-mobile convergence, as some degree of overlap occurs in the broadband access space. However, BMI-T believes that the dominant impact will be to create new market growth opportunities centred on mobility, particularly among business users, rather than a substitute for a fixed line, or even fixed wireless, access connection.
Traditionally Internet access was primarily through PCs, but with the advent of GPRS, Edge, WiFi and UMTS enabled handsets, Internet access is no longer the sole franchise of the personal computer. The mobile content market has largely stimulated the adoption of the mobile handset as an Internet access device in the consumer market, and now with higher bandwidth, lower costs and more sophisticated devices, this is becoming a real alternative, albeit with a difference in dominant modality of use. On the other hand, PC connectivity via 3G is stimulating wireless connectivity, particularly in the business environment.
There are a number of assumptions to be taken into account when looking forward in terms of access technologies and devices among them:
* The growth in total fixed lines is expected to be flat in future, as Telkom arrests the past decline, but the SNO competes successfully in the fixed wireless space. However, Telkom itself could play actively in the fixed wireless and/or wireless access space.
* The future SNO may roll-out CDMA2000, including 3G variants, along with other wireless technologies to the higher tier business customers and a smaller but growing complement of wireline access, including metro fibre to premises.
* The proportion of low-specification GSM phones in the installed base will continue to decline making way for increasing volumes of converged, multi-modal devices, on similar pricing and contract terms.
* GPRS capable phones have been available for a two-year contract refresh cycle; many contract subscribers as well as new subscribers have GPRS phones as at May 2005. As data prices fall and content portals are actively promoted, a growing proportion of users will be enticed into using the GPRS services, thus driving data use over networks.
* Edge, which can be deployed in the 2G spectrum, will serve to sustain investments in GSM in developing countries and thus has high potential for roll-out by mobile cellular operators across Africa. In SA, Edge is emerging as an interim upgrade for operators as it is used to augment other services. As a consequence, it may lead to a longer shelf life for 2G networks and handsets.
* South African mobile operators are likely to drive the adoption of 3G by subscribers and hence devices, at a similar rate to that in other markets worldwide.
* Overall 3G subscriber growth will soon normalise to international trends and be mainly driven by voice use on handsets, rather than by data use on PCs. This will stimulate further uptake of PC data use, including wider casual use in smaller, pre-paid bundles of MBs.
The growth in Centrino-enabled notebook PCs plus iBurst, MyWireless and now 3G cellular data cards will also stimulate wireless PC connectivity. WiMAX enabled notebook PCs will probably enter the local market from 2006 and by 2009 the majority of notebook PCs sold will have embedded Intel Centrino and Rosedale chips. However, the impact of WiMAX in terms of network roll-out and user adoption remains a wildcard at this early stage of market development. WiMAX will be an important backhaul technology at the very least and will begin to emerge as a direct access technology and grow to significant volumes by the end of 2009.
In essence, the transition to 3G is being driven by the mobile operators` search for additional subscriber revenue streams and is pushed to subscribers. A significant lack of awareness and understanding may inhibit the spread of 3G to the broader mass-market subscriber base. The vast majority of subscribers do not understand what 3G will give them, much less why they should invest in a new device or pay a premium just to consume it. Subscribers will not adopt a technology or service that they are not demanding if the value proposition is not clear and particularly if they are forced to pay a premium or unexpected fees for it.
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