With landline use at home in freefall since 2005 and the cellphone/mobile phone market plateauing, the South African telecoms market will need to encourage significantly higher Internet and data usage to grow revenue, according to Analytix BI's latest report: “South Africa Country Report: Telecommunications Market”.
According to the latest AMPS data, by the end of 2011, there were just over 28 million cellphone users in South Africa (82% of the adult population +16 years). The number of users had more than doubled, from 12 million in 2005 to 28 million in 2011, representing an increase of more than 16 million users in six years - a CAGR of 14.1%.
However, between 2008 and 2011, the market had started to plateau, with a CAGR of 9.7% over the period. While this growth rate is expected to continue to decline, there may still be some opportunity.
Roughly 6.3 million South African adults (16+) do not own or use a cellphone, effectively the last frontier for many providers seeking incremental users. Almost half (45%) of cellphone non-users fall into LSM 1-4 “Bottom of the Pyramid” segment and live in the rural areas of KwaZulu-Natal and the Eastern Cape, which provides logistical and infrastructure challenges to reaching this market. There are also over 2.5 million non-users over the age of 50, which accounts for 40% of non-users. Interestingly, of non-users of cellphones, more than half are unemployed or students. Affordable mobile communications packages and an increased focus on data and data usage may be opportunities for cellular service providers to drive revenue.
Landline telephones at home have fallen by nearly 2 million users since 2005, as people have found it more convenient and cheaper to use cellphones. There has also been a growing popularity for DSL lines and mobile connections as technologies such as voice over Internet Protocol (VOIP) become more available to end-users. VOIP is far more cost-effective and easier to maintain than hard-line networks, and the trend towards more Internet Protocol-based telecoms will increase as the stability and reliability of wireless networks improve.
Landline telephones at work had also declined from 2005 until 2009. However, since 2009, there has been a resurgence in the market, and growth. A strong factor was the entry of Neotel, in 2006, and within a few years, it has gained positive momentum and market share by offering competitive products to corporate clients.
These and other results are available in Analytix BI's latest report: “South Africa Country Report: Telecommunications Market”, which is mainly based on an annual consumer survey among a nationally representative sample of over 25 000 people - the All Media and Products Survey (AMPS) conducted by the South African Advertising Research Foundation.
The report provides a comprehensive profile of the entire telecommunications category: historical market sales (past five years), sales forecasts until 2014, local consumer/market trends, competitor analysis of key brands in the market, detailed consumer geo-demographic profiling and Internet and cellphone usage and activities.
Some of the key questions the report seeks to answer are:
* Who are the key players and brands in the market and how are they positioned?
* What are the important cellphone, landline and Internet user and market trends (2007-2011) that should be included in your business strategy?
* Who are the users (and non-users) of cellphones/mobiles, landline, and Internet? Eg, LSM, population group, home language, province, community
* What are users doing with their cellphones/mobiles and computers? Eg, cellphone/mobile activities, Internet activities
Please note that the 90-page PowerPoint report is available for purchase for R9 000 (excluding VAT). Simply visit www.analytixbi.com to view the brochure and order form or contact us directly on (021) 551-7066.
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