The information and communications technology (ICT) sector remains one of the biggest employers and contributors to South Africa’s mainstream economy, the latest ‘State of ICT 2019’ report shows.
The fourth iteration of the Independent Communications Authority of South Africa’s (Icasa’s) review of the telecommunications, broadcasting and postal services sectors shows that, while investment was down marginally year-on-year, the telecommunications sector had bolstered the overall ICT sector’s employment and revenue numbers for 2018.
Total telecommunication investment decreased by 1% from R47.6-billion in 2017 to R46.9-billion in 2018; however, over a four-year period from 2015 to 2018, investment had increased 25.7% from R23.6-billion in 2015.
The main investment contribution was from mobile communication services, which increased 28.5% from R15.2-billion in 2017 to R19.5-billion in 2018.
However, the sector’s yearly investment in fixed-telephone services reported the highest growth, surging 363.2% from R480-million in 2017 to R2.2-billion in 2018, while investment in infrastructure increased 56.9% to R5.9-billion.
Areas that experienced declines in investment were fixed- (wired-) broadband services, down 34.9%; maintenance, with a 36.3% decline; and expansion, contracting 35.2%.
Over the four-year period from 2015 to 2018, the yearly investment in fixed-telephone services increased by 83.1%, fixed- (wired-) broadband services increased by 2.2% and mobile communication services increased 6.9%.
Meanwhile, the revenue reported for the three sectors – telecommunications, broadcasting and postal – showed an aggregate growth of 12.2% from R204-billion in 2017 to R229-billion in 2018.
Telecommunication services revenue increased by 14.4% from R163.9-billion in 2017 to R187.5-billion in 2018, broadcasting services revenue edged up 3.7% year-on-year from R35.6-billion to R36.9-billion and postal services revenue declined by 0.1% to R4.7-billion in 2018.
The combined revenue for the three sectors from 2015 to 2018 increased by 6.5%, supported by a 6.4% increase in telecommunication services revenue and 8.8% in broadcasting. The postal services revenue continued to show a declining trend, decreasing by 3.4% over the same period.
Within the telecommunications sector, the total mobile services revenue and revenue from mobile data services increased by 9.7% to R99.5-billion and 9% to R47-billion respectively in 2018.
Revenue from other mobile services significantly increased by 282.8% to R4.5-billon in 2018, while outbound roaming revenue decreased 47.4% to R199-million.
Revenue from text and multimedia messaging services increased from R3.4-billion in 2017 to R3.9-billion in 2018; however, this was down from R5.1-billion in 2015.
Total fixed Internet and data revenue decreased by 5.9% from R18.3-billion in 2017 to R17.2-billion last year and, while revenue from fixed- (wired-) broadband services decreased 2.7% to R11-billion, it had recorded an increase of 9.4% over the four-year period.
The total fixed-line revenue decreased by 11.1% from R13.7-billion in 2017 to R11.9-billion in 2018.
Meanwhile, the total overall employment for all three sectors increased 18.8% from 51 993 in 2017 to 61 757 in 2018.
Employment within the telecommunications sector increased by 20% to 37 063, while the postal sector employment registered an increase of 21.9% to 19 881 and broadcasting sector employment increased marginally by 0.3% to 4 813.
Over a four-year period, the total sector employment increased by 1.9%, with the telecommunications sector increasing 6.2% and broadcasting marginally lifting 0.2%, while the postal service employment rates recorded a decline of 4.3% from 22 671 in 2015.
Further, the total combined telecommunication services procurement spend of all suppliers was R138.7-billion in 2018, with R91-billion, or 65.9%, of that spent on suppliers on the basis of their broad-based black economic empowerment (BBBEE) rating level.
The total combined broadcasting services procurement spend from all suppliers was R12.9-billion in 2018, with R9-billion, or 71%, of that spent on BBBEE-rated suppliers.
The total combined postal services procurement spend from all suppliers was R747-million in 2018, with only 1%, or R8-million, of that spent on BBBEE-rated suppliers.
Meanwhile, the report noted that national population coverage for third-generation technology remained stable at 99% in 2018, while coverage for fourth-generation and long-term evolution (LTE) increased from 76.7% in 2017 to 85.7% in 2018.
Smartphone penetration in 2018 reached 81.72% in 2018, while LTE device subscribers reached 12.6-million nationwide.
Total mobile cellular phone voice subscriptions increased 5.2% from 87.2-million in 2017 to 91.7-million in 2018, while mobile cellular data subscriptions increased 7.1% from 61.4-million in 2017 to 65.8-million in 2018.
However, despite this continued “dynamic growth”, the achievements fall short of Icasa’s vision of affordable access to the wide range of communication services.
“Though access to mobile services continues to grow, broadband access, both fixed and mobile, remains at unsatisfactory levels, owing to the perceived high cost of communication services, in particular, data services,” the authority says.
Icasa embarked on several interventions to reduce the cost of communication in South Africa, including a market inquiry into mobile broadband services, the amendment and final publication of the end-user and subscriber service charter regulations, and the call termination regulations.
In August, Icasa published the findings document on a priority markets inquiry in the electronic sector as part of a three-pronged approach to reducing the high cost of communication.