Winners take all in the mobile game
AS THE MOBILE MARKET continues to bloom in South Africa, the stakes for the players at the top of the sector become more substantial. But it’s a tough game to play: disruptions are rife, regulatory pressure is on, and new players – such as Telkom Mobile and reinvented players, like Cell C – are plotting to take down the kings of the castle – Vodacom and MTN.
International research and consulting group Delta Partners is looking to provide some guiding light in SA’s frenetic telecoms sector and last week published a “white paper” called South African Telecoms in 2010: high stakes for the big winners, in which it makes some key observations.
Andrew Snead, senior partner for sub-Saharan Africa at Delta Partners, says industry growth last year was hampered by a mix of economic, regu
latory and other dynamics: but those also brought some clarity. The Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica), which requires cellular providers to register their customers, has had a negative impact. For example, declining subscriber numbers.
But Snead says Rica has also had the effect of reducing the number of non-active SIM cards in the market. It’s also reduced the prevalence of single cellular subscribers carrying multiple cards. “That’s led to a more realistic view of how many subscribers the networks have.”
That said, Snead says Rica is failing in its goals, however noble those objectives are. “Rica is supposed to bolster security but the system itself has paved the way for black-market sales of registered SIM cards. There’s no limit on how many SIM cards any one user can register and it’s also easy to register with just a passport, in which case a proof of residence isn’t required. So what that does is it enables people to buy many SIM cards, register them all fraudulently and then resell them.”
The net effect is that cellular providers are being hampered in getting their services to market in a legitimate way, while the impact on crime is highly debatable. The white paper also points out while SA’s broadband market grew significantly