South Africa is a “major” target for ICT-focused investments in the Middle East and African region, says Gartner.
Speaking at the Gartner Symposium, in Cape Town, principal analyst William Hahn said SA is keeping a substantial share of IT investment in the region, which demonstrates its importance as a hub for the last frontier of IT investment worldwide.
South Africa is a leading transitional market and several global IT players have already invested in the country in various ways, noted Hahn.
The country is not only an investment destination, but also a gateway to Africa. The country's important “locus” is its IT services centre, which grew at 12% in 2011 compared with a global rate of 7.7% in 2010, he said.
In contrast, telecom equipment spend is lagging the global recovery, growing at 4.5% compared with the global rate of 17.5%. Hahn pointed to telecoms services' growth rate of negative 6.7%, compared to a global gain of 6%, which took a big hit last year because of mature competition in mobile and growing price wars in the fixed broadband market.
Gartner believes the uncertainty in telecoms is confining investment in equipment and having an immediate effect on services growth. Hahn emphasised that the regulator needs to move on issues such as local loop unbundling.
Get going
SA has a tendency to wait for big projects to fall like “plums” from the sky and not develop and innovate on its own. “People have to get going and be more inventive and innovative on their own.”
Hahn pointed to several opportunities, such as ICT in education, which is the “hottest” vertical. There are also opportunities to innovate based on pending laws, such as anti-smoking applications to cope with proposed tougher laws.
South Africa's profile shows a mix of attraction and difficulty. As an example, he mentioned the recently promulgated charter, which could slow initial investment while companies work out what it means but could later spur equity equivalency deals.
* Nicola Mawson is hosted at the symposium courtesy of Gartner.
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