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Broadband Services to Contribute Significantly to Operators Revenues in Southern Africa Declares Frost & Sullivan - Operators need to make early and significant investments in fixed as well as wireless broadband
Broadband Services to Contribute Significantly to Operators Revenues in Southern Africa Declares Frost & Sullivan

 

PRZOOM - /newswire/ - Cape Town, South Africa, 2011/04/15 - Operators need to make early and significant investments in fixed as well as wireless broadband.

   
 
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The demand for broadband services is growing steadily in the southern African markets. For this reason, major operators and Internet service providers (ISPs) are investing in undersea fibre as well as terrestrial fibre and other infrastructure. These ISPs will target the business segment to achieve significant average revenue per user (ARPU) margins in the short term. However, the revenue potential arising from serving the consumer market is attracting investments into mobile and wireless broadband technologies. Broadband service revenues are expected to contribute significantly to operator margins.

New analysis from Frost & Sullivan (ipcommunications.frost.com) Southern Africa Broadband Market, covering South Africa, Angola, Zambia and Lesotho, finds that the market generated $2,275.0 million in 2009 and estimates this to reach $11,111.6 million in 2016.

The demand for broadband services and the decline of wholesale bandwidth prices are expected to be the main drivers for the broadband market in the southern Africa market.

"The demand for bandwidth intensive applications and services that are available on the internet has been growing in the southern Africa market," notes Frost & Sullivan Information and Communication Technologies Senior Research Analyst Dr. Vitalis G. Ozianyi. "Enterprise users (both large, corporate and SMEs) as well as consumers have adopted the internet as a major source of information and means of conducting business and communication."

High bandwidth costs remain a major constraint to the rapid growth of the broadband market. However, the landing of additional undersea cables has resulted in the decline of international wholesale bandwidth.

"Moreover, this has spurred significant investments into terrestrial fibre and wireless network infrastructure aimed at boosting network capacities," remarks Ozianyi. "Increasing competition in the market is resulting in the decline of retail bandwidth prices, contributing to the steady growth of the broadband market."

On the other hand, the low penetration of fixed broadband infrastructure in the southern Africa market has resulted in high retail bandwidth prices. At the same time, the high cost of maintaining fixed lines translates to high charges for ADSL services. This factor is contributing to the slow growth in the adoption of ADSL as a primary broadband connection for enterprises and consumers.

Leading operators and ISPs are deploying fibre in the last mile. However, the CAPEX involved in fibre deployments is significant and requires steady revenue to ensure ROI in a given timeframe.

"As a result, few enterprises will be connected by this technology in the short term," states Ozianyi. "It is only when the penetration of ADSL and fibre reaches significant levels that the broadband market will achieve its full growth potential."

Significant investments in fixed as well as wireless broadband will enable operators and ISPs to benefit from the revenue potential of the southern Africa broadband market. They need to leverage on the earliest available opportunity to invest in broadband infrastructure and gain an edge over competition in the market.

Moreover, broadband is an enabler for the delivery of next generation services to enterprise users and consumers. The growth of the broadband market will be accompanied with growth in data traffic.

"This will affect fixed, wireless and mobile networks," comments Ozianyi. "Reliable delivery of quality broadband services will be a key differentiator in a highly competitive market that will characterise the southern Africa region."

For more information on this study, please send your complete contact details to Christie Cronje, Corporate Communications, at christie.cronje[.]frost.com.

Southern Africa Broadband Market is part of the Communications Services Growth Partnership Services programme, which also includes research in the following markets: West African and East African markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan (frost.com), the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.

Southern Africa Broadband Market / M568

 
 
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Broadband Services to Contribute Significantly to Operators Revenues in Southern Africa Declares Frost & Sullivan

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