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Transcript of Enterprise Ireland Africa's leading market analysts in IT ...
Enterprise Ireland
Africa's leading market analysts in IT, telecoms and banking
By Tertia Smit
SA Telecoms Industry Briefing
29th March 2006
OverviewOverview
Who is BMI-T
SA Telecoms Industry
Fixed Line Market
Fixed/Mobile market
Mobile Market
Broadband
Opportunities…..
Who is BMI-T? … A Trusted SourceWho is BMI-T? … A Trusted Source
Africa’s leading provider of market intelligence and research-based advisory services
More than 15 years of experience, focusing exclusively on the
– IT industry– Telecoms industry– Banking and financial services industry
Pan- African representation– Successfully completed in-country research in over 40 African countries
BMI-T/ IDC PartnershipWorld-class Methodologies and InsightBMI-T/ IDC PartnershipWorld-class Methodologies and Insight
BMI-T is the African representative of IDC, the world's leading market intelligence and advisory firm in ICT
Our research is fully compliant with IDC’s international methodology and definitions
BMI-T forms part of IDC’s EMEA region- Enables BMI-T to conduct global projects - Responsible for providing IDC’s Africa research More than 775
About IDC- Research offices in more than 50 countries- More than 775 analysts in a global information network- More than 40 years experience analysing ICT markets
Telecoms Telecoms CustomersCustomersTelecoms Telecoms CustomersCustomers
TechnologyTechnology AdoptionAdoption
TechnologyTechnology AdoptionAdoptionConvergenceConvergenceConvergenceConvergence
Mobile Data Mobile Data Solutions and Solutions and ApplicationsApplications
Mobile Data Mobile Data Solutions and Solutions and ApplicationsApplications
Telecoms in Telecoms in AfricaAfrica
Telecoms in Telecoms in AfricaAfrica
Voice, Data and Voice, Data and Value-Added Value-Added
ServicesServices
Voice, Data and Voice, Data and Value-Added Value-Added
ServicesServices
RegulatoryRegulatoryRegulatoryRegulatory
Telecoms Research Areas
WirelessWireless
Telecommunications - Core ResearchTelecommunications - Core Research
BMI-T’s Custom Research BMI-T’s Custom Research
Market segmentation
Customer acquisitionand retention research
Competitor analysisand positioning studies
Channel anddistribution analysis
Branding and positioning
Concept optimisation
Market demandand pricing strategies
Technology/product/serviceadoption and substitution analysis
Customer satisfactionand loyalty surveys
Custom Research
Telecommunications – Custom WorkTelecommunications – Custom Work
Major projects:
Investment Motivation Support for Nigerian Fixed Wireless Operator
Major Multi-country Fibre Network
Nigerian Operator Due Diligence
SNO Due Diligence
Mobile Data Solutions
MVNO market entry assessment
Assessment of a Telecoms platform for the SA weather service
….and others
Enterprise Ireland
Africa's leading market analysts in IT, telecoms and banking
SA Telecoms Industry Overview
SA demographicsSA demographics
Population of about 47 million (30 million households)
SA GDP 2005, R1,340,billion (€ 174 billion)
Telecoms industry in 2005, R85,000 billion (€ 11.1 billion)
Telecoms about 6.34% of GDP spend
4.6 million fixed line users (about 2 million are business lines)
31 million cell phone subscriptions (about 25 million unique users)- penetration over 50%
1.5 million internet subscribers, 4 million users
Fixed vs. mobile growthFixed vs. mobile growth
SA Operators and Service ProvidersSA Operators and Service Providers
Service Provider Type Name Subscriber
National fixed line network operator
Telkom SA Ltd 4.6 m
Second network operatorLicensed in Nov 2005, but not operational yet
0
Mobile operator 1 Vodacom 17.3 m
Mobile operator 2 MTN 10.4 m
Mobile operator 3 Cell C (Virgin coming in a sand MVNO) 3.3 m
Fixed Mobile data carriers Sentech and Wireless Business solutions 20,000
6 Under serviced Licensees Various 20,000
5 Tier 1 ISPsVerizon, Internet Solutions, SAIX, MTN Network Solutions, DataPro
200 Tier 2 ISPS
65 Various WASPS Content providers, aggregators,
ARPUs can be sustained to some extentARPUs can be sustained to some extent
2004Rm
2009Rm
CAGR 2005-2009
Total mobile cellular services (all players)
51,557 76,842 8%
Fixed line and fixed wireless services
28,193 29,384 1%
VANS and other higher growth services
5,611 10,902 16%
Total telecoms services (Rm)
84,936 117,128 7%
Euros (million) 11.1 15.2
Note: Scenario based, using traditional service categories
Factors that could sustain ARPU in future:
Pent-up demand for bandwidth in general
– Access/ lines– VPNs
Price elasticity of demand for certain types of voice services
Triple play / TV Massive growth in
broadband services and bandwidth …
Telecommunication services revenue forecasts, Rbn, 2004-2009Telecommunication services revenue forecasts, Rbn, 2004-2009
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2004 2005 2006 2007 2008 2009
ISPs, VANs and other services
Fixed line and fixed wirelessservices revenues
Total mobile cellular services(all players)
Note: Scenario based, “most likely accelerated competition scenario”
Still some growth left in the market even under
“most likely accelerated
competition scenario”
An even more accelerated scenario could claim some
of the revenue growth … but …
Enterprise Ireland
Mobile market outlook
Mobile RevenuesMobile Revenues2005 2006 2007 2008 2009
Mobile voice
52,517
57,367
60,917
62,983
65,120
Mobile data cellular operators
3,475
4,400
5,400
6,500
7,824
Reseller mark-up (independent players)
1,518
1,606
1,658
1,668
1,678
Subtotal mobile cellular operators
55,992
61,767
66,317
69,483
72,944
Value-added services WASP/CSP (other players)
1,170
1,463
1,755
2,018
2,220
Total mobile cellular services (all players)
59,962
66,009
70,923
74,420
78,155
Endusers
Mobile devices
SPs, Billing
& CRM
Network operators
Gatewayproviders
Content aggregators& wasps
Infrastructure & solution providers
Content providers
Voice vs. Data Revenue Growth ( RM)Voice vs. Data Revenue Growth ( RM)
Source: Vodacom, MTN, Cell C, BMI-T forecast
52,517
57,36760,917
62,983 65,120
5,4004,4003,4756,500 7,824
6.2%
7.1%
8.1%
9.4%
10.7%
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2005 2006 2007 2008 2009
0%
2%
4%
6%
8%
10%
12%
Mobile voice Mobile data cellular operators % data of revenue
Mobile Revenues (including handsets)-RmMobile Revenues (including handsets)-Rm
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Value-added services WASP/CSP (other players)
Reseller mark-up (independent players)
Mobile data cellular operators
Mobile voice
Note: “Accelerated competition scenario”Upside potential exists
Assumes some limited regulatory impact on interconnection pricing
Service and Solution Providers for Mobile Data and Banking ApplicationsService and Solution Providers for Mobile Data and Banking Applications
Endusers
Mobile devices
SPs, Billing
& CRM
Network operators
Gatewayproviders
Content aggregators& wasps
Infrastructure & solution providers
Content providers
Pre-paid vs. post-paid per operatorPre-paid vs. post-paid per operator
5,102
6,950
459556
1,168
1,3911,420
1,872
1,702 1,932
6,377
10,941
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Cell C Mar '04 Cell C Mar '05 MTN Mar '04 MTN Mar '05 Vodacom Mar'04
Vodacom Mar'05
Note: Lighter shading - contract subscribers
Postpaid -15% Prepaid - 85%
Cell phone application awareness and adoptionCell phone application awareness and adoption
0%
20%
40%
60%
80%
100%
Send SMS
Take PhotosU
se MM
SSM
S voting, competition
Dow
nload a new ringtone
Dow
nload something else
Browse the internet
Listen to music
Cellphone banking
Access your email
Info subscriptions.Video C
allsG
ambling
Used at some stage Maybe in the future Never
Potential growth opportunity
Enterprise Ireland
Broadband South Africa
“Broadband” access technologies in SA“Broadband” access technologies in SA
Fixed Line
Digital subscriber line (DSL)- Telkom
3G Wireless access
3G TD-CDMA - Sentech & WBS
3G WCDMA - MTN & Vodacom
HSPDA- Vodacom and MTN
Niche (in SA) & emerging technologies
CDMA 2000 EV-DO- USALsPower line communication (PLC)WiFi - UniNet Pre-WiMax – City of
Johannesburg
BMI-T :SA Wireless Access and Broadband Market Report, July 2005
Broadband household penetration (end of 2004)Broadband household penetration (end of 2004)
55.0
44.0
32.0
28.0
21.0
17.0
14.0
11.0
6.0
3.2
2.5
1.7
1.0
0.8
0.4
0.2
(0.68)
0.20
68.0
0 10 20 30 40 50 60 70 80
Korea
Hong Kong
Canada
Japan
USA
France
UK
Germany
Estonia
Slovakia
Hungary
Lithuania
Poland*
Czech Republic
Romania
Slovenia
Croatia
SA LSM 7-10
SA Total
Household penetration (%)
Based on all households
Based on households with
high living standards
India: 0.12%
Brazil:2%
Source: IDC and BMI-T, 2005
Worldwide home broadband services average revenue per subscriber by region, 2005–2009 Worldwide home broadband services average revenue per subscriber by region, 2005–2009
SA
? SA 300
100South Africa
North African countries
North African countries
-50% in 2 years-50% in 2 years
Source: IDC and BMI-T, 2005
Entry level (incl ISP fee)
We are now here
Worldwide , 2004.Total = 145.7 millionSource: IDC 2005
Worldwide , 2004.Total = 145.7 millionSource: IDC 2005
Broadband services by technology
S A: 2004Total = 41, 614 3G WCDMA
1,000 , 2%
TD-CDMA, 4,614 , 11%
ADSL, 36,000 ,
87%
S A: 2009Total = 870,000
UMTS TDD and TD-CDMA
100,000 11%
CDMA2000 1x and 1xEV-DV 100,000
11%
WiMAX Active (Scenario A)
50,000 6%
3G WCDMA/HSDPA
260,000 30%
ADSL, 360,000
42%
Could be much higher if Telkom
pursues aggressively and
LLU
SA PC broadband access trendsSA PC broadband access trends
Download speeds will increase dramatically Entry-level service prices will decline by 50% within two years Broadband Internet access using PCs currently 100 000 connections, growing to 870 000 in 2009 ADSL will continue to account for the majority of all broadband connections over the forecast period (and could be accelerated further) Mobility needs will drive 3G broadband connectivity in SA The net result being accelerated broadband penetration, but still well below what could happen in an even more accelerated competition environment where prices come down even faster
Source: BMI-T, Wireless Access and Broadband Market, June 2005
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Music downloads
Purchasing goods online
Game downloads
Video Downloads
Chatlines
Chat forums
VoIP like Skype or QQ
Use a Webcam
or Videocam
Blogging
Gambling
Online gaming
Used at some stage Maybe in the future Never
Adoption by of Internet ApplicationsAdoption by of Internet Applications
Potential growth opportunity
Enterprise Ireland
Opportunities in the Telecoms sector
Opportunities in the fixed line marketOpportunities in the fixed line market
Second Network Operator just been licensed, VSNL, India is a majority shareholder
IP converged network for incumbent operator, Telkom, offering IP TV etc.
Triple play services
VOIP services
Broadband internet services and applications
Opportunities in the mobile marketOpportunities in the mobile market
Virgin going to be an MVNO in SA con CellC’s network
3 G networks with HSPDA just being launched allowing for mobile broadband, and increased download speeds
Mobile banking, payment purchasing
Mobile TV currently being launched by Vodacom
2010 world cup in SA
Other opportunities in the telecoms market market ,cont……Other opportunities in the telecoms market market ,cont……
Solutions for the 2nd economy- previously disadvantaged, poor digitally excluded
TDD CDMA networks will be able to offer voice, therefore handsets, therefore all applications and services that go with it.
VANS can self provide now, so thus opens up the landscape
Municipal networks are starting to proliferate
Government contemplating their own telecoms network
Opportunities into Africa
Good websites for referenceGood websites for reference
Telecoms
BMI-T.co.za
ITWeb.co.za
ICTWorld.com
Cellular.co.za
MyADSL.co.za
Waspa.org.za
Business
Moneyweb.co.za
Fm.co.za
Busrep.co.za
Businessday.co.za