SA’s fixed-line, mobile ISPs jostle for market share

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South African fixed-line and mobile Internet service providers (ISPs) are jostling for market share.

So says Africa Analysis MD Dobek Pater, following reports that local ISP Webafrica is up for sale, with a number of companies looking to snap it up.

Webafrica’s potential suitors include the likes of Telkom and Afrihost, among others.

However, Webafrica could not comment on the imminent sale of the company, at the time of publishing.

Webafrica offers three types of Internet access: Fasterfast Fibre, fixed LTE and ADSL. Last month, the company started offering fixed LTE on the Telkom LTE network.

The company was founded in 1997 by Matthew Tagg, who served as chief executive officer and managing director. Tagg also co-founded Teraco Data Environments in 2007.

Tim Wyatt-Gunning joined Webafrica as CEO in 2011. In April 2018, Christoff Botha officially took over the position of chairman of the Webafrica board.

On its Web site, Webafrica says it has 60 000 customers with 120 employees between its Johannesburg and Cape Town offices.

In 2017, the company split into two separate entities: Gridhost for Web hosting and Webafrica for connectivity.

Pater notes some of the large fixed-line ISPs in SA are Telkom (retail operations), MWeb, Afrihost, Vox (retail) and Webafrica.

“However, if we include mobile ISPs, the mobile virtual network operators (MVNOs), then we also need to consider FNB, MRP Mobile, Virgin Mobile and Smart Mobile.

“Note that even the ‘fixed’ ISPs such as Afrihost offer mobile products, while FNB offers DSL, a fixed-line product.”

Last month, Afrihost Mobile rebranded to Air Mobile. The Air Mobile service runs on MTN’s mobile network.

“The distinction along technology lines has been blurred for a number of years now. One could also consider HeroTel to be one of the larger ISPs, although the diverse service providers under this umbrella still operate their individual brands.”

HeroTel now has over 70 000 customers, making it SA’s largest fixed wireless ISP and one of the fastest growing national fibre players.

According to Pater, the ISP space is a very competitive market in SA, driven by two key events.

He notes the first is the ruling of 2007 which allowed all value-added network services licence-holders at the time to self-provide infrastructure. This resulted in more competition emerging to the more traditional operators, he says.

The second event is the emerging of open access infrastructure models and growth of the reseller model.

He explains Cell C has been hosting MVNOs on its infrastructure for years, but the market became a lot more competitive at the service layer, with the fibre network operators opening their networks to retail ISPs.

“Subsequently, we have also seen growth of ISPs and resellers on fixed wireless networks; for example, fixed LTE, like Rain and Telkom.

“The South African government’s intention is to drive retail services competition even further. One of the vehicles it has proposed to achieve this is the development of the national wireless open access network (WOAN).”

However, Pater points out the WOAN appears to have been put on the backburner for now, with the withdrawal of the Electronic Communications Amendment Bill from Parliament in February.

“Now that the new Cabinet has been constituted, the Department of Communications is expected to begin clarifying its thinking about future market development in this respect.”

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