The total telecommunications services market – fixed, mobile and data – in South Africa was worth approximately R77-billion in 2005 and should grow to R98-billion in 2010 (excluding interconnection fees).
This is an estimate based on two BMI-TechKnowledge reports, The Top 350 & Corporate Report and the SME Report. 

Tertia Smit, senior telecoms analyst at BMI-T and co-author of the reports, says that between them the two reports provide an analysis of the telecoms spend of the close to 600 000 economically-active business entities in South Africa which earn more than R300 000.00 per annum.
Non-VAT registered businesses, informal and occasional businesses were thought to number around 2,5-million and were not included in the analysis.
“At the overview level, BMI-T segments the overall telecoms spending market into three categories: the Top 350 and other corporate market; SMEs; and the residential/private and informal business sector.
“The private and informal sector constitutes 45% of the total market share, while the formal SME segment comprises 30,5% and the corporate market makes up 24,5% of the total market,” says Smit.
About 66% of all formal SMEs earn less than R1-million and make up approximately 12,5% of the business telecoms spend, with an average of R2 000.00 per month.
On the other end of the scale, the Top 350 companies only make up 0,6% of all companies but contribute a significant proportion of all telecoms spend with an average spend of close to R2-million a month each.
In the corporate market the telecoms service type that most money is spent on was fixed voice, followed by mobile and the rest amounted to fixed data and other services that were split between Telkom and the ISP and VANS data services.
In the SME market almost half of all telecoms spend is on fixed voice services.
“Under BMI-T’s ‘most likely accelerated competition scenario’, the overall corporate market spend on telecommunications services is expected to grow at an average rate of 5,6% between 2005 and 2009, and the SME market is expected to grow at an average rate of 2,8% over the forecasted period.
“Higher growth in sophisticated data services is the main factor driving corporate growth at a more rapid rate than SMEs; voice services are expected to slow down significantly, and fixed-mobile substitution will continue,” adds Smit.
This follows a period of higher growth over the past five years, but the business market as a whole is now expected to mature more rapidly, with spending patterns being influenced by more intense levels of competition and falling prices for most service categories, within both the fixed line and mobile cellular sectors.
Only the adoption of more sophisticated services will compensate for this, and ensure that growth rates remain positive, albeit not impressive.
Currently Telkom is the only major provider of traditional (PSTS) fixed voice services, and with very limited VoIP uptake during 2005, the wide adoption of traditional fixed-to-mobile LCR and call-back services in the corporate sector remains the dominant alternative.
New wholesale pricing regulations may come into force that will, inter alia, make VoIP services more economical to use, and these could lead to more rapid adoption of voice over IP and as a result, exert a further downwards influence on the prices of the combined basket of tariffed voice services.