The South African ICT market is strategic and quickly growing. It is one of the key markets in Africa and the Middle East because of its enormous size, wealth and the proliferation of many regional telecom players.
Cloud services, mobile advertising and mobile apps will be some of the highest growth segments in the South African market, contributing half a billion dollars in new revenue from 2012-2017, according to a new report from Pyramid Research.
With its low fixed broadband adoption, mobile broadband is becoming popular in the region. The increase in bandwidth afforded by new international connections such as WACS (West African Cable System), which came online in May 2012, is enabling lower data pricing and higher bandwidth.
“South Africa is a key market in the AME region not only because of its size, level of income and maturity, but also because it is the home for key players in the market, MTN and Vodacom in particular,” says Pyramid Research Analyst at Large, Jan ten Sythoff.
Data is the key driver for telecom operators in South Africa, and it underpins three major areas of growth: mobile apps, cloud services and mobile advertising. Each of these three areas is relatively small, but demonstrate attractive growth rates; furthermore, oftentimes operators see these areas as strategic, having additional benefits such as as enhancing the brand and supporting growth in other areas and improving their competitive positioning, said Sythoff.
Pyramid research forecasts mobile app revenue to show very strong growth, with a CAGR of 48%. The huge growth in the adoption of smartphones, the increasing availability of apps and the introduction of new payment methods are key drivers. Cloud services are also enjoying strong growth, and the report suggest expected revenue to grow to $245m in 2017, up from just $72m in 2011.