The number of fixed and wireless broadband connections in South Africa are expected to reach more than 4,2-million subscribers, representing a compound annual growth rate (CAGR) of 32%, over the period 2008 to 2013.
This is one of the findings from BMI-TechKnowledge's 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, wireless subscribers driven mainly by 3G HSPA connections are expected to dominate the local broadband market, accountinmg for 67% of total broadband connections.
As at December 2008, 3G HSPA subscribers accounted for 54% of total broadband connections and had overtaken ADSL connections which stood at 39%.
In terms of new services, the market witnessed the launch of Neotel's CDMA-2000 broadband offerings and also the launch of Telkom's W-CDMA broadband services.
A major wild-card in the broadband market remains the success of WiMax roll-outs. While iBurst, Neotel and Telkom already have spectrum licences and have started rolling out, a number of other players were given trial licences, and Icasa is expected to finalise the methodology soon in terms of which they will allocate the remaining scarce spectrum that is deemed to be suitable for WiMax-based services.
Although the broadband market did not witness price cuts as deep as those witnessed in 2007 during the past 12 months, there were notably cheaper offerings from Neotel and some of Telkom's DO-3G offerings have been priced significantly lower than those of the two incumbent mobile operators.
The imminent launch of new under-sea cables for International bandwidth will impact prices across the board in the short to medium-term.
Another recent trend is the emergence of more "time-of-day based tariffs", with ISPs like Cybersmart launching packages that allow subscribers to get five times their Internet cap when they connect between specific times.
BMI-T expects to see a steady shift by the service providers towards improving their service offerings, targeting narrower niches, some with triple play services (voice, data and video), and other value-added services, in a bid to attract and retain customers and improve ARPU levels.