Market intelligence and consulting company BMI-T has upwardly revised its previous forecasts for the broadband market.
Releasing its latest wireless access and broadband report on Monday, BMI-T said while ADSL is still expected to lead the way in terms of revenue growth, much of the new growth in terms of subscriber numbers is expected to come from wireless connectivity, with cellular operators likely to exploit this opportunity most significantly.
“Although by comparison with the higher performance characteristics of the offerings in most developed countries we would probably have to class very few of South Africa’s current products as being true broadband, BMI-T does expect the specifications of all the major players’ offerings to be progressively upgraded over the forecast period,” it said.
BMI-T’s revised outlook recognises that a tipping point has been reached in respect of growing subscriber demand, as competition intensifies and broadband prices continue to fall.
Increased competition has come even more intensively than previously forecast from cellular operators, particularly Vodacom and latterly MTN, which have rolled out HSDPA ahead of the previously forecast schedule and have correspondingly demonstrated the huge interest that high-end customers have in their mobile internet offerings.
Correspondingly, as Telkom continues to upgrade its DSL services to higher speeds at cheaper prices, all signs now indicate that its roll-out cannot keep up with the latent demand, it noted.
BMI-T expects nearly two million PC broadband connections by 2010, although the overall definition of “broadband” used in this case is a generous one, including all connection speeds.
Despite this higher growth forecast, the more aggressive pricing dynamics result in revenue growth forecasts that are almost the same as the previous ones, it added.
BMI-T believes that in terms of South Africa’s global competitiveness, this will result in a substantial improvement in broadband penetration, although most of this is still a process of catching up with the rest of the world.
“The government’s ambitious goal of a 5% population penetration will not be reached at this rate, but at two million connections we would, in fact, achieve close to 4% of a population of 50-million people in 2010. This would be a big achievement, especially considering South Africa had a 0,2% penetration at the beginning of 2005,” it noted.
Overall internet usage penetration within the entire population would, however, not go up significantly, because most of the growth in connections would be from the same high-end users. In fact, many will have more than one connection — one in their notebook PC for mobility and another one at home or at the office, it added.
BMI-T also expects that, by 2010, South Africa will have more than 40-million gross mobile subscribers, with the majority of them having Edge or higher-specification phones, of which more than 11-million will be 3G technologies.
Nearly five million GSM/3G phones could be dual-mode Wi-Fi capable by this time, thus hastening the trend towards an early form of fixed mobile convergence.
South Africa will also have a growing proportion of converged cellular devices (or smart phones) in the South Africa-installed base, thus further boosting the alternative internet-connectivity landscape, it added. — I-Net Bridge