MTBPS 2024: The buoyant telecommunications sector is projected to grow, supported by continued 5G expansion and the proposed introduction of spectrum trading.
This is despite the transport, storage and communications sector expanding by only 1% in the first six months of 2024, according to the sector performance provided in the Medium-Term Budget Policy Statement (MTBPS).
A National Treasury official revealed telecoms regulator ICASA will require around R120 million to invest in legal administration for the future spectrum auctions.
South African telcos are rolling out 5G, despite challenging economic times.
The country leads the way when it comes to 5G network rollout in Sub-Saharan Africa, with expectation that more 5G networks will come online across the African continent this year.
Mobile network operators MTN, Telkom and Vodacom, for example, have started rolling out 5G services in SA, albeit still mostly concentrated in the big cities.
In May 2020, Vodacom went live with its 5G mobile network in three cities – Johannesburg, Pretoria and Cape Town. Rival MTN launched its 5G network in June 2020, going live with 100 sites. Last year, the mobile operator revealed it had rolled out over 2 500 5G sites across the markets in which it operates.
Mobile data-only network operator Rain was the first telco to activate a commercial 5G network, in September 2019.
Kenechi Okeleke, director of regional, social and policy research at GSMA Intelligence, previously told ITWeb that 27 operators in 16 markets in the region have launched commercial 5G services, to date, with a number indicating plans to launch services in the coming months.
“Throughout 2024, we should see more 5G networks come online in Africa,” he said at the time.
Based on the latest Ericsson Mobility Report, 5G subscriptions will represent 16% of all mobile subscriptions in Sub-Saharan Africa by 2029 – the equivalent of 180 million 5G mobile subscriptions.
National Treasury’s projections on the sector performance mirror that of Statistics SA, which listed the communication sector among those that helped the economy rebound, avoiding a technical recession in the fourth (Q4) of 2023.
In March, Stats SA announced the country’s economy grew by a marginal 0.1% in Q4 (October-December), taking the annual growth rate for 2023 to 0.6%.
Real gross domestic product (GDP) for the period under review was R1.158 trillion, which is above the pre-COVID-19 reading of R1.150 trillion, but still below the peak of R1.161 trillion recorded in the third quarter of 2022, according to Stats SA.
Notably, it was the transport, storage and communication industries that helped steer growth, increasing by 2.9% in the fourth quarter.
“Increased economic activities were reported for land transport, air transport, transport support services and communications,” said Stats SA.
“In the fourth quarter, six of the 10 industries kept the economy in the green. The transport, storage and communication industry made the biggest positive impact, expanding by 2.9% and contributing 0.2 of a percentage point to the GDP growth. Increased economic activity was reported for all transport services across the industry.”
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