Competition Brings Big Changes to South Africa’s Telecom Sector, Pyramid Research Finds

CAMBRIDGE, Massachusetts - South Africa’s telecom market is in the midst of a dramatic change, as incumbent fixed-network operator Telkom SA faces increasing competition not only from mobile voice and data services but also from competitive fiber network buildouts, according to a new report from Pyramid Research (www.pyr.com), the telecom research arm of the Light Reading Communications Network (www.lightreading.com).

Communications Markets in South Africa offers a precise, incisive profile of the country’s converged telecommunications, media, and technology sectors based on proprietary data from our research in the South African market. The 30-page report provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies such as WiMax, IPTV, and VoIP. This executive study provides a comprehensive view of the South African communications market by analyzing key trends, evaluating near-term opportunities and assessing upcoming risks factors. Download an excerpt of this new report here: www.pyr.com/downloads.htm?id=18&sc=PR040909_CIRSAF

South Africa is the largest telecom market in the Africa & Middle East region in terms of revenue and is one of the most advanced in Africa in terms of penetration rates, notes Yejide Onabule, Analyst at Pyramid Research and author of the report. “The high penetration rates, however, make it one of the slowest growing markets in the region, driving operators to seek new ways to distinguish themselves and develop new revenue streams,” she says.

Telkom SA, the incumbent fixed-network operator, is feeling the pressure. “Fixed voice revenue has been declining in the past few years and this trend is expected to continue; revenue is expected to fall from US$2.7 billion in 2008 to US$2.1 billion in 2014, mostly due to the falling cost of mobile telephony,” says Onabule. “Telkom’s revenue will decline by 20 percent in the next five years due to a continuation of fixed voice revenue’s downward trend and competing operators’ plans to build out fiber networks that will cut into Telkom’s business service revenues,” Onabule adds.

The need for high-capacity networks has triggered a wave of WiMax and other fixed-wireless access (FWA) capex, allowing operators to bypass Telkom’s former monopoly of the last mile. “Operators that previously relied on Telkom’s network such as MTN and Vodacom are now building their own national fiber-optic networks, contributing to Telkom’s revenue decline over the forecast period,” explains Onabule. “Telkom also lost its monopoly in fixed communications when the newly established second national operator Neotel was licensed in 2005,” she adds. Neotel, has finally launched services over fixed-wireless CDMA and WiMax networks, while smaller ISPs, such as MWeb, have made some inroads in the high-growth DSL market.

Communications Markets in South Africa is part of Pyramid Research’s Africa and the Middle East Country Intelligence Report Series. Pyramid Research’s premium Country Intelligence Reports are the industry’s best available analysis on market trends, regulatory environments, and competitive dynamics for 60 countries worldwide.

Download an excerpt of this new report here: www.pyr.com/downloads.htm?id=18&sc=PR040909_CIRSAF

Communications Markets in South Africa is priced at US$990 and can be purchased online here: www.pyramidresearch.com/store/CIRSOUTHAFRICA.htm?sc=PR040909_CIRSAF or through Dave Williams via email at dave.williams@pyr.com or telephone at +1-858-485-8870.

About Pyramid Research

Pyramid Research (www.pyr.com) offers practical solutions to the complex demands our clients face in the telecommunications, media, and technology industries. Our analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for over 100 countries - a distinction that has remained unmatched for nearly 25 years. As the telecom research arm of the Light Reading Communications Network, Pyramid Research works with Heavy Reading, providing the communications industry’s most comprehensive market data, trusted research, and insightful technology analysis.

About Light Reading

Founded in 2000, Light Reading (www.lightreading.com) is the leading online media, research, and focused event company serving the US$3 trillion worldwide communications market. Lightreading.com is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. Light Reading’s research arms, Heavy Reading and Pyramid Research, provide the most comprehensive communications research, market data, and technology analysis in close to 100 markets around the world. Light Reading produces nearly 20 targeted communications events including TelcoTV, Ethernet Expo New York and Ethernet Expo London, The Tower Summit @ CTIA, and Optical Expo, as well as focused one-day events tailored for cable, mobile, and wireline executives. Light Reading was acquired by United Business Media in August 2005 and operates as a unit of TechWeb.

About TechWeb

TechWeb (techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events, Interop, Web 2.0, Black Hat, and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, and Wall Street & Technology magazines. TechWeb also provides end-to-end services including next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than US$2.5 billion.

*13.3 million business decision-makers: based on number of monthly connections

About United Business Media Limited

UBM (UBM.L) focuses on two principal activities: worldwide information distribution, targeting and monitoring; and, the development and monetization of B2B communities and markets. UBM’s businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewelry traders, from farmers to pharmacists - with integrated events, online, print and business information products. Our 6,500 staff in more than 30 countries are organized into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently. For more information, go to www.unitedbusinessmedia.com.

Press contact: Jennifer Baker +1-617-871-1910 jbaker@pyr.com

Source: Pyramid Research

Jennifer Baker, +1-617-871-1910, jbaker at pyr.com