SA's cellular subscriber numbers appear to have reached some kind of stability. However, market analysts say the true picture will only appear in March 2011, once the full effects of the SIM registration law are seen.
Arthur Goldstuck, MD of local research firm World Wide Worx, says the March 2010 numbers from the cellular network operators show there are 49.6 million mobile phone connections in the country. This refers to the total number of active SIM cards.
Earlier this week, Vodacom, the country's largest network operator, stated that - for the year ended March - it had 26.3 million active SIM cards. So far, MTN has said it has 16.4 million and the smallest operator, Cell C, has 6.9 million.
Goldstuck says this is well down on the market peak of 52 million in March 2009, but barely changed from December 2008.
“So, while some may point to as much as a four percentage point drop from March 2009, if one rewinds just three months, and sees a change of well below one percentage point, we can see RICA has in fact stabilised a market that was moving rapidly beyond 100% penetration,” he says.
RICA is the law that requires all SIM cardholders to register by the end of this year.
Spiwe Chireka, an analyst at international consulting firm Frost & Sullivan, agrees with Goldstuck's numbers, although her company's estimates for March are not yet complete.
“The marginal drop makes sense, because what we are seeing is a deduction in the new subscribers. As the December RICA deadline looms, we will see active subscribers who have not been registered affected as well. So it will only be in March next year that a true reflection of the South African market size will be seen,” she says.
Both analysts agree that as the cellular market edges closer to saturation point, the game moves from subscriber numbers to selling more voice minutes and other services to keep revenue figures rising.
This will mean improved average revenue per user (ARPU), which is gained by dividing the telecommunications company's revenue by the total number of users. It has become an industry standard for measuring the health of a cellular network operator.
“One hundred percent-plus penetration is the nemesis of ARPU, as it means the same rands were being divided between multiple connections, naturally bringing down apparent ARPUs. The truth is that we have been dealing with ARPC, or average revenue per connection, rather than true ARPU. Now, as the market matures, ARPU will become more and more real a measure,” Goldstuck explains.
Chireka says recent marketing activities by the cellular networks indicate they are looking to boost their ARPU numbers.
“We have seen them offering more and more attractive data and service packages, and they are also actively marketing their off-peak minutes. This includes such marketing strategies as offering points for free airtime in off-peak times, after certain amount of rands spent on peak hours.”
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