SA internet: cracks widen

After years of delays, restrictions, monopoly domination and a government that enforces a “managed liberalisation” policy that is neither managed nor liberal, there have been growing signs — despite government — of a sort of springtime in the South African telecommunications industry.

Russell Southwood, who runs the London-based Balancing Act Africa, covering telecoms and internet issues in Africa, agrees:

Almost unnoticed the rules of the game are changing and the South African market shows key developments that will transform how markets operate. DSL subscribers there look set to break through the “critical mass” barrier and there are irresistible pressures building up for low prices and no caps.

He says numbers of internet users (and in particular broadband users) are reaching levels that will begin to make an impact on traditional media, too. Competition is coming from newly licenced entrants, mobile operators, and ISPs that are able to compete under the new legal environment for telecoms.

So everybody is now rushing into infrastructure and the vertical integrators … will offer triple and quad play. Telkom will probably now face nine competitors. The traditional contenders will be: MTN, Vodacom, Neotel, and Sentech (that has already decided to get out of the retail space). Possible insurgents contenders will include: MWeb, IS, Verizon and Datapro. Rumour has it that after the recent issue of Wi-MAX spectrum that there is enough remaining spectrum for 4 players Neotel’s retail launch will take place in March/April of next year and it is working on a triple/quad play product.

… The market is unlikely to sustain nine infrastructure players but this flurry of competition will open up the VoIP market, lower national prices and grow the user base for a wider range of services. And what’s not to like about that?

Lots of interesting detail in his article.