Huge investments are expected to take place in South Africa over the next five years with the recent arrival of LTE (long term evolution) services, as well as the upcoming BRICS and ACE undersea cables, raising the tide for revenue streams from data services, according to a new report from Pyramid Research.
“We expect South Africa’s telecom market revenue to grow at a compound annual growth rate (CAGR) of 2 percent over the forecast period, from estimated US$14.4bn in 2013 to US$16.1bn in 2018,” said the global telecoms industry monitoring firm.
Mobile communications was once again South Africa’s dominant telecom sector in 2013, generating US$10.2 billion.
However, as market players get pulled into aggressive price wars with further cuts in mobile termination rates, PR expects voice revenue to decline at a compound rate of -2 percent over the forecast period.
Over the next few years, according to the report, the most significant growth in the market should occur in mobile data and fixed VoIP services.
The firm has projected that mobile data revenue would almost double from its 2011 figure of US$2.8bn to surpass US$5bn in 2018.
The report went on: “The rise of VoIP (Voice over Internet Protocol) will be similarly strong and can be credited to new offers for businesses, principally targeting the small and mid-size enterprise (SME) segment.
“We expect revenue from these services to grow at an impressive CAGR of 29 percent, from US$46m in 2013 to US$160m in 2018. The biggest declines will come in dial-up Internet, which is expected to be dwarfed by broadband Internet following recent and expected activation of new submarine cables.”
VoIP is a methodology and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol.