South Africa communication services spend to grow 0.7% this year

Wednesday 30 August 2017 | 12:04 CET | News

End-user spending on communications services in South Africa is forecast to total ZAR 122 billion in 2017, a 0.7 percent increase from 2016, mainly due to shifts to less expensive legacy service offerings as competition heats up, according to a study by Gartner. This slight growth in spending compares favourably with the global market, which is forecast to show a 0.2 percent decline. Business customers are applying effective pressure to service providers to get shorter contracts, lower and more accurate pricing, and shifting to software-defined architectures that improve their ability to order only what they need at the time growth occurs. 

Gartner expects to see increased internet channels to branch offices, and the development of hybrid WANs as service providers improve fixed coverage and access to public clouds. The study reveals growth in the Internet of Things promises a limited source of additional revenue for service providers, but ecosystems in areas such as automotive, manufacturing, healthcare and smart cities will require extensive expertise in professional services, consulting and support to deliver solid growth. Connectivity alone will become a commodity, just as with legacy subscribers.

According to Gartner, end-user mobile data and voice spending is forecast to total ZAR95.5 billion in 2017, a 1.2 percent increase from 2016. In South Africa (just as in the global market), the decline in spending on voice services (5.7 percent in 2017) offsets gains from an increase in data connections.  

South African providers achieved good growth overall in 2017, following some tough years, including a particularly difficult 2015. They achieved overall revenue growth, although growth in the average revenue per user slowed, due to new cheaper devices coming onto the market and legacy offerings encountering fierce competition. 

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

::: add a comment