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South Africa Telecom Services Revenue expected to decline at a CAGR of -2.4% 2016-2021

Telecommunications is one of the fastest growing industries in South Africa.  Many companies have entered the market.  South Africa’s ICT sector has shown rapid expansion over the past two decades. The government has increasingly sought to provide support for nationwide development of internet connectivity through the National Broadband Plan, while rising data demand and the burgeoning e-commerce and mobile payment segments will further underpin sector development.

Although market competition remains a significant challenge, recent moves to buy out illiquid companies with sizeable infrastructure networks could indicate the beginning of a period of consolidation in the industry. This could benefit long-term profitability and boost operators’ ability to improve service offerings and capture greater market share, lending an optimistic outlook to the country’s telecom sector. There will be an increase in buyouts of smaller ISP companies as a leading trend within the African telecom market in 2017.  The buyout of Raha ISP in Tanzania and Neotel in South Africa both by Liquid Telecom are examples of the same.

South Africa will remain one of the largest telecom service revenue markets in the AME region in 2016, generating estimated revenue of $9.2bn. Going forward, the telecom services revenue in South Africa to decline at a CAGR of -2.4% in USD during 2017-2021, due to local currency depreciation. However, in local currency, the revenue is expected to expand by 3.3%, due to increasing uptake of mobile and fixed data services. Operators are investing in upgrading their network infrastructure, including the expansion of 4G services and roll out of fiber networks across the country.

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