Burgeoning telecoms market
South Africa boasts the largest and most developed telecommunications network in Africa, including the latest in fixed-line, wireless, satellite and cellular technology.
The country has over 14 million mobile phone and almost five million fixed line subscribers.
Telkom, a parastatal, is the only licensed provider of public switched telecommunications services. Cellular services are currently provided by three licensed operators: Vodacom, MTN (Mobile Telephone Network) and Cell C. South Africa runs on the GSM cellular system.
Parastatals Transtel (a division of Transnet) and Eskom are the only organisations in South Africa that maintain private telecoms networks. Communications satellite users include Telkom, Sentech and Transtel.
In 1997, Telkom was granted a further five-year exclusivity period as part of its license conditions. In March of the same year, the government sold a 30% stake in Telkom to the Thintana Communications consortium made up of SBC Communications International and Telecom Malaysia. The agreement included a commitment to install 2,8 million new lines (including 12 000 payphones) and replace 1,25 million analogue lines by March 2002.
Although Telkom's monopoly has expired its right to provide basic services has simply been extended to include the second network operator and, in some cases, signal carrier Sentech. But as the second operator has not yet been licensed, Telkom remains the sole provider of services by default.
Telkom listed on the JSE in 2003. The listing did not raise anything like the kind of money the government once hoped to get. It brought in R3,9bn for a 25% stake, against an estimated R10bn two years ago.
The South African cellular market has boomed since its inception in 1994, and is the fourth fastest growing GSM market in the world. The cellular industry has been accelerated by the successful introduction of pre-paid subscriber packages, with contract subscribers showing slower growth.
It is expected that mobile data subscribers will experience growth over the next few years as business users migrate to SMS (Short Message Service), WAP-enabled (Wireless Application Protocol) and similar services due to increased mobile data needs.
Access to telecoms services is still a major obstacle. One of the independent Communications Auhority of South Africa's (Icasa) key mandates is to promote quality and affordable telecoms services to those previously denied them.
This includes the encouragement of service provision to previously neglected or ignored areas, and promoting the involvement of new players in the industry.
The second issue is increasingly important in light of the fact that Telkom still dominates the South African market. While the restructuring of Telkom, and the eventual licensing of a second network operator, is expected to involve mostly black-owned interests, it is a move that is eagerly awaited by South African businesses and consumers who are weary of the parastatal's monopoly.
