Consumers prefer internet on cellphones

Image: FreeDigitalPhotos.net

Fixed-line penetration has fallen to fewer than 4-million connections this year‚ compared with 5.5-million connections 12 years ago. Last year there were enough cellphones in circulation for every South African to have one.

The telecoms and internet sectors of the economy should be on the cusp of a boom period‚ but the slow rollout of infrastructure‚ coupled with high unemployment and muddling regulations‚ were constraining it‚ analysts warned.

Frost & Sullivan analyst Chipo Ngongoni on Tuesday, 26 June 2012, said the Southern African telecoms market had revenue of R32bn in 2010 and this could grow to an estimated R161bn in 2017.

Arthur Goldstuck‚ MD of World Wide Worx‚ said those numbers might be on the low side. He estimated data service revenue alone had earned operators more than R27bn in 2010. But he agreed internet connectivity in SA was significantly lower than the potential customer base.

"The big problem is that the notion of broadband is often used to mean internet access‚ which it is not. There are many people who are occasional internet users through their cellphones."

Ngongoni said traditional technologies for broadband connection were experiencing a gradual decline in subscriptions.

The main targets for internet service providers in Southern Africa were now businesses‚ as individuals required constant connectivity.

"With improved connectivity‚ revenue and growth in the market are expected to be spurred by cellphone broadband and data-based‚ value-added services for the next three to five years‚" he said.

"The growth of the broadband market is‚ however‚ likely to be inhibited by regulatory inefficiencies. Low disposable incomes will‚ moreover‚ restrain the demand for data services‚ which will be further aggravated by limited access to infrastructure."