This report provides a comprehensive overview of the trends and developments in the telecommunications markets of three African countries: The continent’s leading market, South Africa, as well as its two neighbours, Lesotho and Swaziland. Subjects covered include:

Key statistics;
Market and industry overviews;
Regulatory environment and structural reform;
Major players (fixed and mobile);
Infrastructure development;
Mobile voice and data markets;
Internet, including broadband development;
Convergence of mobile and fixed, voice, data and multimedia services.
(Approx. number of pages: 127)
Current publication date: September 2007 (6th Edition)

South Africa is the economic powerhouse and leading telecommunications market of the continent, but a lack of competition in several key areas has slowed developments down in recent years and allowed the country to be overtaken by some other African countries in terms of certain key indicators. At more than 70% penetration, South Africa will see a flattening subscriber growth curve in its mobile market over the next few years, leaving service providers to compete aggressively on price, value-add and quality of services. The boom will be taken over by the provision of broadband Internet access, combined with voice and entertainment services in a converging and more competitive environment of fixed, wireless and mobile platforms. The small kingdoms of Lesotho and Swaziland are expected to follow in the footsteps of their powerful neighbour, privatise their incumbent telecom monopolies and further liberalise their markets.

South Africa
South Africa’s telecom sector boasts the continent’s most advanced networks in terms of technology deployed and services provided. The country is taking a regional lead role in the convergence of telecommunication and information technologies. The long awaited new Electronic Communications Act (formerly Convergence Bill) was finally enacted in mid-2006. Sweeping liberalisation measures taken two years earlier, legalising - among other things - the use of VoIP, have begun to change the country’s telecoms landscape fundamentally. ISPs are turning into phone companies, and vice versa. Both are moving into delivering audio and video content over their networks, while in turn the traditional electronic media carriers are discovering the potential of their infrastructure for telecommunications service delivery.

The newly licensed SNO, Neotel finally launched services in competition to Telkom SA in early 2007, using nationwide infrastructure of Eskom and Transtel, the country’s electricity and railway utilities. Broadcasting signal carrier Sentech is another major owner of telecommunications infrastructure, and some of the largest municipalities in the country are also rolling out their own networks. Wireless technologies are being pursued to provide alternatives to Telkom’s copper access network. The end of Telkom’s monopoly on the international SAT-3 submarine cable in 2007 is expected to help reduce the costs of telecommunication in South Africa which are currently among the highest in the world.

Despite being open to competition by more than 200 ISPs, South Africa’s Internet sector has been stagnant in recent years due to the expensive operating environment created by Telkom SA’s dominance in the fixed-line and bandwidth market. Under the incumbent’s monopoly rule, fixed-line teledensity has continuously fallen since 2000. Modest growth has now returned to the Internet market, stimulated by the launch of ADSL and wireless broadband services in 2004, followed by continuous price cuts in the following years. Further stimulus is expected in 2007 from the launch of the SNO and an expansion of 3G/HSDPA services by the country’s mobile network operators.

The continent’s leading mobile market, South Africa has seen rapid uptake of GSM since competition was introduced to the sector more than 10 years ago. With market penetration exceeding 70% and mobile number portability introduced in 2006, the subscriber growth curve has started to flatten, increasingly forcing the three network operators to find innovative ways of distinguishing themselves from the competition in order to gain and retain customers. The introduction of mobile Internet and multimedia services via 3G mobile technology is one way of doing this and has lead to a marked increase in data traffic. Another is the adoption of the MVNO model, highlighted by the entry of Virgin Mobile into the market. For the country overview, see chapter 2, page 11.

Lesotho
Telecommunications in Lesotho has undergone gradual transformation from a state-owned monopoly to a privately majority-owned national operator, with competition in the mobile sub-sector since 2002. Mobile market penetration was approaching 20% in mid-2007 compared with a fixed-line teledensity and Internet penetration of less than 3%. The use of wireless technology has led to an accelerated increase of teledensity, which in turn will foster further growth in Internet penetration. Following the end of Telecom Lesotho’s exclusivity period, more competition may be introduced in several market segments. For the country overview, see chapter 1, page 1.

Swaziland
The telecoms sector in Swaziland features an old-style posts and telecom monopoly operator for fixed services and one of the last mobile monopolies on the continent as well. Nevertheless, fixed and mobile penetration is relatively high compared with other countries in the region. The level of Internet usage, only about average in the region, has been held back by a lack of attractive broadband offerings, caused by the limited extent of the fixed-line network and limited options for affordable international bandwidth. The planned unbundling and eventual privatisation of the incumbent and the introduction of more competition would enable the market to live up to its relative GDP strength. For the country overview, see chapter 3, page 95.


Key highlights:
Fixed-line, mobile and Internet/broadband market forecasts to 2010 and 2015 for South Africa and Swaziland;
Second national operator (SNO) in South Africa has launched services;
Telkom SA continues to post record results;
South African mobile market is approaching saturation;
Mobile data revenue close to 10% of total in South Africa;
ADSL is rapidly replacing dial-up as the main Internet access method in South Africa;
Telkom SA prepares major WiMAX launch in early 2008;
Telecom Lesotho is pushing fixed-mobile convergence;
Swaziland’s incumbent SPTC due for privatisation following major restructuring program.
Telkom South Africa ADSL, dial-up and satellite Internet subscribers - 2003-2007

Year
(March) ADSL Dial-up
and satellite
2003 2,700 96,000
2004 20,300 121,900
2005 58,300 168,400
2006 143,500 141,400
2007 255,600 49,400

(Source: BuddeComm)

For those needing high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:

Government policies affecting the telecoms industry;
Market liberalisation;
Telecoms operators – privatisation, acquisitions, new licences and competition;
Internet and broadband development and growth;
The fast growing mobile markets of the region and their expected saturation levels;
Mobile application and content developments.
Data in this report is the latest available at the time of preparation and may not be for the current year.

1. LESOTHO
1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview of Lesotho’s telecom market
1.3 Regulatory environment
1.3.1 Telecommunication Policy of 1999
1.3.2 LTA Act of 2000
1.3.3 Regulatory authority
1.3.4 Telecom sector liberalisation in Lesotho
1.3.5 Privatisation of Telecom Lesotho
1.4 Fixed network operator in Lesotho
1.4.1 Telecom Lesotho (Pty) Ltd
1.5 Telecommunications infrastructure
1.5.1 National telecom network
1.5.2 International infrastructure
1.6 Internet market
1.6.1 Overview
1.6.2 National Internet hub
1.6.3 Lesotho’s ISP market
1.6.4 Broadband
1.7 Mobile communications
1.7.1 Overview of Lesotho’s mobile market
1.7.2 Major mobile operators
1.8 Broadcasting market
1.8.1 Overview
2. SOUTH AFRICA
2.1 Key statistics
2.2 Telecommunications market
2.2.1 Overview of South Africa’s telecom market
2.3 Regulatory environment
2.3.1 Historical background
2.3.2 Regulatory authority
2.3.3 Telecommunications Amendment Bill
2.3.4 Regulation of Interception of Communications Act 2002
2.3.5 Electronic Communications Act
2.3.6 Universal Service Agency (USA)
2.3.7 Telecom sector liberalisation in South Africa
2.3.8 Spectrum licensing review 2007
2.3.9 Privatisation of Telkom SA
2.3.10 Interconnection
2.3.11 WiFi
2.3.12 WiMAX
2.3.13 Number Portability (NP)
2.3.14 Telkom’s submarine cable monopoly under scrutiny
2.4 Fixed network operators in South Africa
2.4.1 Telkom SA Ltd
2.4.2 Second National Operator (SNO) Neotel
2.4.3 Rumours of a Third National Operator (TNO) – InfraCo
2.4.4 National private networks
2.4.5 Carrier of carriers
2.5 Telecommunications infrastructure
2.5.1 Telkom’s national telecom network
2.5.2 Municipal networks
2.5.3 International infrastructure
2.5.4 Call centres
2.6 Broadband & Internet Market
2.6.1 Internet market
2.6.2 Broadband market
2.7 Convergence
2.7.1 VoIP telephony
2.7.2 Next Generation Networks (NGN)
2.7.3 IPTV, Triple Play
2.7.4 New broadcasting licence tender 2006
2.7.5 Broadcast signal distributors
2.7.6 Digital media
2.7.7 Online and mobile banking (m-banking)
2.8 Mobile communications
2.8.1 Overview of South Africa’s mobile market
2.8.2 Regulatory issues
2.8.3 Mobile technologies
2.8.4 Major mobile operators
2.8.5 Mobile voice services
2.8.6 Mobile data services
2.8.7 Mobile content and applications
2.9 Forecasts
2.9.1 Notes on scenario forecasts
2.9.2 Forecasts – fixed-line services
2.9.3 Forecasts – Internet services
2.9.4 Forecasts – broadband subscribers
2.9.5 Forecasts – mobile services
3. SWAZILAND
3.1 Key statistics
3.2 Telecommunications market
3.2.1 Overview of Swaziland’s telecom market
3.3 Regulatory environment
3.3.1 Overview
3.3.2 Telecom sector liberalisation
3.4 Fixed network operator in Swaziland
3.4.1 Swazi Telecom
3.5 Telecommunications infrastructure
3.5.1 National telecom network
3.5.2 International infrastructure
3.6 Data communications
3.6.1 Overview
3.7 Internet market
3.7.1 Overview
3.7.2 Internet initiatives
3.7.3 Internet access locations
3.7.4 E-banking
3.7.5 Swaziland’s ISP market
3.7.6 Swaziland Internet Exchange Point
3.8 Mobile communications
3.8.1 Overview of Swaziland’s mobile market
3.8.2 Major mobile operator
3.9 Broadcasting
3.9.1 Free-to-Air (FTA) broadcasting
3.9.2 Pay TV
3.10 Forecasts
3.10.1 Notes on scenario forecasts
3.10.2 Forecasts – fixed-line market
3.10.3 Forecast – Internet services
3.10.4 Forecast – mobile services
4. GLOSSARY OF ABBREVIATIONS


Exhibit 1 – Eskom’s licence dispute
Exhibit 2 – First round USAL licence holders
Exhibit 3 – VANS – to self-provide or not to self-provide
Exhibit 4 – Transtel’s communications network
Exhibit 5 – Internet for rural communities
Exhibit 6 – Tiscali's exit from SA
Exhibit 7 – Telkom SA T-Zone
Exhibit 8 – Spotlight on Vodacom GSM community phones




Table 1 – Country statistics Lesotho – 2006
Table 2 – Telephone network statistics – 2006
Table 3 – Internet provider statistics – 2006
Table 4 – Internet user statistics – 2006
Table 5 – Mobile statistics – 2006
Table 6 – National telecommunications authorities
Table 7 – Fixed lines in service and teledensity – 1995 - 2006
Table 8 – Internet users and penetration rate – 1997 - 2006
Table 9 – Internet host computers – 1998 - 2005
Table 10 – Mobile operators, technology, subscribers and annual change – 2006
Table 11 – Mobile subscribers and penetration rate – 1996 - 2006
Table 12 – Country statistics South Africa – 2006
Table 13 – Telephone network statistics – March 2007
Table 14 – Internet provider statistics – 2006
Table 15 – Internet user statistics – 2006
Table 16 – Mobile statistics – 2006
Table 17 – National telecommunications authorities
Table 18 – Telkom SA shareholder structure – March 2007
Table 19 – Telkom SA’s fixed line data revenue and annual growth – 2002 - 2007
Table 20 – Telkom SA ISDN channels – 2000 - 2007
Table 21 – Fixed lines in service and teledensity – 1999 - 2007
Table 22 – Internet users and penetration rate – 1995 - 1996; 1998 - 2006
Table 23 – Internet host computers – 1995 - 1996; 1998 - 2005
Table 24 – Telkom SA wholesale Internet bandwidth and annual growth – 2002 - 2006
Table 25 – Telkom ADSL, dial-up and satellite Internet subscribers – 2003 - 2007
Table 26 – WAPA industry snapshot – October 2006
Table 27 – Mobile operators, technology, subscribers and market share – 2006
Table 28 – Mobile subscribers and penetration rate – 1994 - 2006
Table 29 – Vodacom South Africa key statistics – March 2007
Table 30 – MTN South Africa key statistics – December 2006
Table 31 – Cell C key statistics – June 2006
Table 32 – Fixed-line and fixed-wireless subscriber forecast growth – 2010; 2015
Table 33 – Internet user forecast growth – 2010; 2015
Table 34 – Broadband subscriber forecast growth – 2010; 2015
Table 35 – Mobile subscriber forecast growth – 2010; 2015
Table 36 – Country statistics Swaziland – 2006
Table 37 – Telephone network statistics – June 2006
Table 38 – Internet provider statistics – 2006
Table 39 – Internet user statistics – 2006
Table 40 – Mobile statistics – 2006
Table 41 – Fixed lines in service and teledensity – 1995 - 2006
Table 42 – Internet users and penetration rate – 1996 - 2006
Table 43 – Internet host computers – 1998 - 2005
Table 44 – Mobile subscribers and penetration rate – 1998 - 2006
Table 45 – Swazi MTN monthly ARPU – 2001 - 2006
Table 46 – Fixed-line and fixed-wireless subscriber forecast growth – 2010; 2015
Table 47 – Internet user forecast growth – 2010; 2015
Table 48 – Mobile subscriber forecast growth – 2010; 2015