The number of fixed and wireless broadband connections in South Africa is expected to reach more than 3,3-million subscribers from 2007 to 2012 – a compound annual growth rate of 33%.
This is according to BMI-TechKnowledge's latest report "SA Wireless Access and Broadband Market Forecast and Analysis.
Fezekile Mashinini, telecoms analyst at BMI-T and co-author of the report, says that, under the base scenario, DSL subscribers are forecasted to account for 45% of the total market over the forecast period, while wireless – both fixed and mobile – will account for 55%.
“Currently, DSL accounts for 49%, but is shedding some market share to the fast growing HSDPA wireless service being provided by the two mobile operators Vodacom and MTN," says Mashinini. "HSDPA’s forecasted CAGR over the period is 35%.”
Different service take-up scenarios for broadband services are outlined in the report depending on the outcome of potentially disruptive events in the market, such as wide scale deployment of WiMAX, which has recently been accepted by the ITU as a 3G standard, and other factors such as the availability of spectrum for wireless services.
The base scenario assumes a 400% growth of performance for the same price, between 2005 and 2012. Blended average revenues per subscriber will accordingly also fall dramatically, but will be sustained to some extent by customer uptake of increasingly higher performance offerings.
“The market witnessed an unprecedented reduction in services prices during 2007 and this has fuelled market demand for broadband services in both residential and business segments," Mashinini says. "Price reductions are putting pressure on the broadband service provider’s (BSPs) margins, and even though the increased demand will lead to increased revenues, still BMI-T expects to see a steady shift by the service providers towards improving their service offerings to be more attractive by selling triple play services (voice, data and video), and other value-added services, in a bid to improve ARPU levels.”