ICT market analyst BMI-TechKnowledge (BMI-T) has announced the publication of its South African Internet Services report, which has highlighted a stable and mature internet market.
In a statement on Tuesday, BMI-T analyst Iain Machanick said that industry consolidation has meant that service providers’ success will be determined by the value and service offering to the end users.
“Overall the South African internet services market grew by 18,9%, while the access market grew by 16,2% and the non-access market grew by 20,6%. The driving factor behind the growth has been, the associated cost savings, convenience, the steady growth of B2B, the improvement of customer service and the arrival of wireless access.”
BMI-T believes that internet service providers should be evaluated against criteria such as backbone, peering, customer orientation in terms of focus on consumer or business, track record in the industry and current service levels, as these standards offer a better means of comparison than the currently accepted debate over tiers.
In terms of access, the report shows that for the foreseeable future, the corporate market will be serviced by leased lines, while the consumer market will be primarily focused on dial-up, both analogue and ISDN, and is expected to grow by 6% over the next five years.
On new technologies, Machanick said that the growth experienced by ADSL has been primarily due to the dial up subscribers seeking higher throughput.
“The uptake of ADSL services in South Africa has been reasonable given the negative publicity surrounding the delay of the launch, the lack of nationwide availability, the 3GB cap and pricing issues affecting resellers’ margins,” he asserted.
“In addition the arrival of wi-fi has meant that vendors and service providers will have to develop a solid business case for the technology and uncover the true value for the subscribers, bearing in mind that the wireless technology is simply a different means of connection.”
The market inhibitors uncovered by the report include the lack of available bandwidth and it associated cost, the delay in licensing the country’s second national network operator — which has meant a lack of competition to the incumbent Telkom, the perceived security threats of the internet and the effects of the worldwide economic downturn. — I-Net Bridge