Electronics, Information Technology and Communications
South Africa is at the leading edge of the continent's technology evolution with its
consistent introduction of new technologies and solutions to the market, such as Voiceover-
Internet Protocol (VoIP) and broadband.
The South African telecommunications market is the largest in Africa, in terms of both
customers and revenues. The market is growing consistently and substantially. Fixed-line
penetration is estimated at 9,3%, while mobile penetration is significantly higher at
around 114%. South Africa is the fourth-fastest-growing mobile communications market
in the world. The number of subscribers is more than 50,47m (end 2009). Rapid growth
is expected to continue in the medium term, driven by further penetration, increased
innovation and competitive activity in the markets.
The cellular market has also experienced explosive growth since inception and continues
on a strong growth path. The market largely comprises three operators (Cell C, MTN and
Vodacom) and five service providers, two of which are independent (Autopage Cellular
Two mobile networks (MTN and Vodacom) have thus far implemented 3G networks in
South Africa, although at present they are limited to parts of the large metropolitan areas.
Cell C is also expected to offer 3G services in the future, although it is not ascribing much
weight to mobile data, preferring to concentrate on voice as a future revenue generator.
South Africa has an estimated 990 000 broadband subscribers (end 2009), while the
privatised monopoly Telkom had 548 000 ADSL fixed-line subscribers at the end of 2009.
The total size of the South African information technology (IT) market is expected to increase
from US$9,3bn in 2010 to around US$13,7bn in 2014. A wave of public infrastructure
projects with IT dimensions, many associated with the 2010 FIFA World Cup�, will
immunise South Africa against negative growth in IT spending due to the recent global
economic slowdown. Much spending on key IT verticals, such as telecommunications,
banking and mining will continue, driven by factors internal to those sectors. South Africa
has one of the Middle East and Africa's most significant IT markets in terms of size and
growth potential. Its IT market is supported by factors such as the 2010 FIFA World Cup�,
government digital divide projects and the telecommunications sector.
South Africa's IT market is the largest in Africa, while it ranks 20th in the world in overall
market size and eighth in IT spending as a proportion of GDP. A major opportunity lies in
increased capital spending by SMMEs, with particular focus on environmental resources
management (ERM) and customer relationship management (CRM) applications.
Software, hardware and services spending was projected for 2009 at US$1,7bn,
US$3,9bn and US$3,2bn, respectively.
The growing penetration of the Internet should fuel personal computer demand for higherend
products in the urban consumer market. The number of broadband Internet users is
projected to more than double to around 2,15m by 2013.
Source: BMI, 2009, Q3.
South Africa has the largest Internet market in Africa, with an estimated 9,5m Internet
users, which constitutes approximately 20% of the population. There are some 1,4m dialup
accounts. Ranked among the elite in terms of worldwide IT spend, South Africa has
ready access to cutting-edge technologies, equipment and skills, and has the advantage
of access to the rapid expansion of telecommunications and IT throughout the African
continent. For this reason, South Africa is seen as the gateway to Africa - South African
companies have long been providing IT services in other African countries and have been
thriving because of their understanding of the local business environment.
Implementing solutions under various business conditions in Africa has given South
African software companies the time and space to perfect their solutions. South African
companies understand that each country and each market demands a different kind of
solution and that success in Africa lies in providing tailored solutions.
The South African market is the gateway to Africa's wireless future. Through its ability
to provide high-quality products and services in line with global trends, the country is
offering significant return on investment and greater access to world-class technology for
business and consumers throughout the continent. Already, growing levels of turnover
and market-share are evident in this market; increases that will continue to come from the
geographic expansion of company activities as well as product and service expansion.