Mobile operators generate billions on Covid-19
SOUTH Africa’s retail mobile data market generated R58 billion revenue, representing a 9.5 percent annual growth as it cashed in on the working and studying from home phenomenon in line with restrictions to curb the spread of the Covid-19 pandemic.
The latest research by Africa Analysis this week in its 2021 5G Market Outlook Report that the mobile data market locally grew at a phenomenal rate compared with other African markets.
“South Africa has a huge mobile subscriber base relative to most African markets; it has better infrastructure covering most of its populations,” it said.
The report said mobile data usage surged 73 percent year-on-year in 2020, representing the highest increase in mobile data usage in three years.
It said the usage reached a total of 2.6 exabytes for the year.
“This was due in large part to the Covid-19 lockdown restrictions and much of the social, educational and even business activity taking place from the home. This demonstrates the requirement for high-speed, good quality broadband connectivity for the home, which will form the foundation for a subsequent range of home applications,” said the report.
Since the outbreak of Covid-19, face-to-face discussions between colleagues, business suppliers, clients and shareholders have moved to online platforms including Microsoft Teams, Skype and Zoom, contributing to this significant increase of data usage.
Africa Analysis said it was also bullish about the roll out of 5G networks, saying it would result in growth to 11 million South African subscribers and 43 percent population coverage by 2025 if the high demand spectrum auction by the Independent Authority of South Africa (Icasa) goes ahead as planned at the end of next month.
The report said the 5G market was in its infancy phase in South Africa with an estimated 90 000 subscribers and 4.4 percent population coverage at the end of 2020.
Mobile operators are expected to roll out big infrastructure plans once the high demand spectrum auction has been finalised, said the report.
“On conclusion of the auction, we expect to see rapid 5G coverage roll out. For example, MTN, at its 5G launch, stated that it would cover 10 million people within 12 months after being awarded the spectrum,” said the report.
The high demand spectrum auction would result in low cost 5G smartphones, and prepaid 5G products and the licencing of Wireless Only Access Network Operators (WOAN), and the role of wholesale network operators would enable 5G coverage to grow rapidly, the report said.
Icasa’s plans to auction high demand spectrum and licence WOAN at the end of March were hit with lawsuits by Telkom and MTN who both have submitted applications to participate in the spectrum auction, but opposed aspects of the auction process.
Icasa chairperson Keabetswe Modimoeng this week that the auction would commence on 31 March, and an external and independent auctioneer who would be overseeing and managing the entire auction process.
“The conclusion of a contract and appointment of the service provider for the auction remains a key factor, and we remain confident that we are not off the track but in a better position to complete the licensing of high demand spectrum”, said Modimoeng.
Modimoeng also assured stakeholders that the authority would ensure that the process was concluded with the necessary speed but without untoward haste.
“We indeed assure all stakeholders of our steadfast commitment towards public interest, and hereby give certainty that the licensing of the high demand spectrum is imminent,” said Modimoeng.
However Africa Analysis said all parties involved, mobile operators and the telecoms regulator were hoping the ongoing litigations would not derail the timelines set for the auction. However, once this was in the hands of the courts, it was inevitable that there may be delays.
“It is unlikely that all the issues raised by MTN and Telkom will be resolved before March, unless a compromise solution is reached by parties behind closed doors and then the matter is formally withdrawn in court. Seemingly these private discussions have yielded little results to date,” said the report.