With landline use at home in freefall since 2005, and the mobile phone market flattening out, the SA telecoms market will need to encourage significantly higher Internet and data usage to grow revenue, new data warns.<\/p>\n
Market research firm, Analytix Business Intelligence\u00a0notes that, according to the latest AMPS data, by the end of 2011 there were just over 28 million mobile phone users in SA, or 82% of the adult population aged 16 years and over.<\/p>\n
It said that the number of users 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 \u2013 a \u00a0compound annual growth rate (CAGR) of 14.1%.<\/p>\n
However, in its report entitled \u201cSouth Africa Country Report: Telecommunications Market\u201d, Analytix BI finds that between\u00a02008 and 2011, the market 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,” it said.<\/p>\n
Approximately 6.3 million South African adults (16+) do not own or use a cellphone, effectively the last frontier for many providers seeking incremental users,\u00a0Analytix BI says.\u00a0Almost half (45%) of cellphone non-users fall into LSM 1-4 \u201cBottom of the Pyramid\u201d segment and live in the rural areas of KwaZulu-Natal and the Eastern Cape which provides logistical and infrastructure challenges to reaching this market, it added.<\/p>\n
Analytix BI found that 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,” the group said.<\/p>\n
It pointed out that landline telephones at home have fallen by nearly two million users since 2005 as people have found it more convenient and cheaper to use cellphones.<\/p>\n
“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,”\u00a0Analytix BI said.<\/p>\n
It said further that landline telephones at work 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, has gained positive momentum and market share by offering competitive products to corporate clients, the group said.<\/p>\n