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ICASA lifts lid on state of SA’s ICT sector

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Despite a tough economic climate, South Africa’s telecommunications sector continues to grow, according to the latest State of the ICT Sector in SA 2020 report.

Compiled by the Independent Communications Authority of SA (ICASA), the report examines the performance and developments in the ICT sector, focusing on three areas regulated by the authority, namely telecoms, broadcasting and postal services.

According to ICASA, the findings are based on data collected over a 12-month period ending 30 September 2019, compiled from secondary sources such as Statistics SA (Stats SA), OOKLA as well as through a detailed questionnaire sent to relevant stakeholders.

Overall, the ICT sector’s revenue increased by 4%, from R229 billion in 2018 to R238 billion in 2019, with the telecoms sector making up the majority of the revenue gains.

The report shows telecoms revenue increased by 3.6% from R187 billion in 2018 to R194 billion in 2019, broadcasting revenue increased by 3.8% from R36 billion to R38 billion, and postal services revenue increased by 19.9% between 2018 and 2019.

“The telecommunications sector is a critical part of modern lifestyles and has significant influence on the growth of the country’s economy as it strengthens productivity levels,” it states.

“Mobile subscriptions and Internet penetration and other related services continue to grow. South Africa’s fibre network and data centre markets are expanding rapidly.”

South Africa’s cloud computing space has seen a hive of activity recently, with multinationals choosing to bring data centres to the country.

Total revenue of the three sectors for the 12 months ending 30 September each year.
Total revenue of the three sectors for the 12 months ending 30 September each year.

Zoning in on telecoms sector revenues, the report highlights that total fixed Internet and data revenue increased by 33.2% in 2019, while total mobile services revenue and total fixed-line revenue decreased by 1.5% and 10.7%, respectively, in 2019.

“Over a period of five years, total mobile services revenue and total of any other revenue increased by 5.7% and 3.1%, respectively. Total fixed Internet and data revenue increased by 10.8% and total fixed-line revenue decreased by 9.4% for the same period,” the report finds.

Telecoms revenue for the 12 months ending 30 September each year.
Telecoms revenue for the 12 months ending 30 September each year.

According to the report findings, total mobile services revenue and revenue from mobile data services decreased by 1.5% and 14.8%, respectively, in 2019. Revenue from outbound roaming increased by over 100% in 2019, it states.

“For a period of five years, total mobile services revenue and revenue from mobile data services increased by 5.6% and 7.4%, respectively. Revenue from outbound roaming and revenue from voice services decreased by 3.6% and 7.6%, respectively.”

Mobile services revenue for the 12 months ending 30 September each year.
Mobile services revenue for the 12 months ending 30 September each year.

Turning to total fixed Internet and data, ICASA says revenue increased by 40.4% from R19 billion in 2018 to R26 billion in 2019.

Revenue from fixed (wired) broadband services increased by 26.5% for the same period.

The report also shows that over a five-year period, total fixed Internet and data revenue and revenue from fixed broadband services increased by 5% and 13.5%, respectively.

Fixed Internet revenue over 12 months ending 30 September each year.
Fixed Internet revenue over 12 months ending 30 September each year.

On total fixed-line revenue, it indicates revenue decreased by 10.7% from R11.9 billion in 2018 to R10.6 billion in 2019. “Revenue from fixed-telephone calls decreased by 14.1% in 2019. For a period of five years, the fixed-line revenue shows a decrease in all categories.”

Investment overview

Even though the telecoms sector continues to show signs of growth, its investment declined under the period in review.

According to ICASA, total combined investment in the sector decreased by 17.1% from R46 billion in 2018 to R38 billion in 2019.

It adds that annual investment in mobile communication service and annual investment in fixed broadband services decreased by 5.6% and 49.7%, respectively, in 2019.

Total telecommunication investment for the 12 months ending 30 September each year.
Total telecommunication investment for the 12 months ending 30 September each year.

Declining employment levels

On the employment front, the ICT sector, which has been described as one of the biggest employers in the country in the past, has seen employment numbers decline.

South Africa’s overall unemployment rate currently stands at 29.1%, according to Stats SA, with that number expected to shoot up in the wake of the coronavirus pandemic.

Data from the report shows the overall total employment numbers for all three of the sectors ICASA regulates decreased by 8.2% in 2019.

Over the same period, employment changes in the specific sectors saw telecoms sector employment decrease by 8.9%, postal sector employment dropped 7.1% and broadcasting sector employment decreased by 7.3%.

“When looking at the employment numbers over a five-year period, the overall total sector employment decreased by 0.7%.”

Total employment for the three sectors as of 30 September each year.
Total employment for the three sectors as of 30 September each year.

The report shows that employment in the telecoms sector decreased from 37 063 in 2018 to 33 782 in 2019. Female employees as a proportion of the total employment decreased by 23.5% in 2019.

“Over a five-year period, telecommunications sector total employment increased by 2.2%. Over the same period, the number of female employees decreased by 1.9%.”

In terms of skilled personnel, the telecoms sector recorded an increase of 4.2%, semi-skilled and unskilled decreased by 60.7% and 76.3%, respectively, in 2019. Disabled employment also decreased by 14.5% for the same period.

On measures of black economic empowerment employment, the report finds that top management (exco members) in the telecoms sector increased by 12.6%, black top management increased by 19.1% and black females in top management decreased by 3.5% in 2019.

Persons employed in the telecoms sector as of 30 September each year.
Persons employed in the telecoms sector as of 30 September each year.

*All graphs sourced from ICASA's State of ICT Sector in SA 2020 report.

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