The latest BMI-TechKnowledge report reveals the number of fixed and wireless broadband connections in SA is expected to reach over 3.3 million subscribers. This represents a compound annual growth rate (CAGR) of 33%, over the period 2007 to 2012.
Fezekile Mashinini, telecommunications analyst at BMI-T and co-author of the report, says under the base scenario, DSL subscribers are forecasted to account for 45% of the total market over this period. Wireless, both fixed and mobile, will account for 55%.
"Currently, DSL accounts for 49% but is shedding some market share to the fast-growing HSDPA wireless service being provided by the two mobile operators Vodacom and MTN. HSDPA`s forecasted CAGR over the period is 35%," adds Mashinini.
Different service take-up scenarios for broadband services are outlined in the report, depending on the outcome of potentially disruptive events in the market, such as wide-scale deployment of WiMax, and other factors such as the availability of spectrum for wireless services. The International Telecommunication Union recently accepted WiMax as a 3G standard.
The base scenario assumes a 400% growth of performance for the same price, between 2005 and 2012, says Mashinini. Blended average revenue per subscriber will accordingly also fall dramatically, but will be sustained to some extent by customer uptake of increasingly higher performance offerings, he adds.
"The market witnessed an unprecedented reduction in services prices during 2007, and this has fuelled market demand for broadband services in both residential and business segments," explains Mashinini.
"Price reductions are putting pressure on the broadband service provider`s margins, and even though the increased demand will lead to increased revenues, still BMI-T expects to see a steady shift by the service providers towards improving their service offerings to be more attractive by selling triple play services (voice, data and video), and other value-added services, in a bid to improve ARPU levels," concludes Mashinini.
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