The South African broadband market is making significant headway despite heavy regulation in the sector, says Frost & Sullivan analyst Lindsey Mc Donald.
Analysis by the research firm found that, in 2006, the broadband market earned revenue of no less than $195 million (R1.5 billion at today's exchange rate).
"An unclear regulatory environment is proving to be a challenge for market entrants. There are areas in which the policies of government and the regulatory authority seem to differ and this makes conditions challenging for operators."
Despite these difficulties, says Mc Donald, the broadband market is performing well and growing at a pace that is likely to remain consistent until 2013. She attributes this growth to increased use of the Internet. "Fixed-line broadband services are growing steadily, while mobile and wireless services are experiencing high levels of uptake."
According to Frost & Sullivan, continued demand for lower prices will enhance competition and improve service uptake. Competition also encourages greater investments in infrastructure supporting broadband services, states Mc Donald.
"Moreover, several municipalities throughout SA are either in the process of rolling out broadband or are planning to. Cape Town, Johannesburg and Tshwane have all announced broadband strategies to cut municipal telecommunications costs and provide services to clients using alternative access points such as kiosks."
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