Mobile to drive 5G growth

Fitch Solutions, an intelligence solutions affiliate of Fitch Ratings, has said it expects the uptake of consumer 5G services in South Africa to be accelerated by mobile-based offerings from 2023, as the country’s telecommunications companies increase their investments into the technology.

Data-only network operator Rain, partly-owned by Patrice Motsepe, former Firstrand CEO Paul Harris and former FNB CEO Michael Jordaan, last year took on established companies Vox, Vumatel and Telkom’s Openserve in the lucrative fixed-line internet market with the launch of consumer-focused 5G services.

In a research note, Fitch Solutions said although Rain currently has a lead in retail-focused 5G services, Fitch believes that mobile players, mainly MTN and Vodacom, will be best placed to drive growth of consumer 5G services once they too launch offerings.

“That said, we expect the main 5G services growth to be from the mobile segment; as such, our newly released proprietary mobile 5G forecasts envision a mobile 5G service launch from 2021, with subscriptions picking up pace from 2023 onwards, driven by the proliferation of 5G-enabled devices,” Fitch Solutions said.

“However, affordability will be a key challenge for operators and they will need to focus on driving growth in higher-value, post-paid subscriptions to enable device uptake.”

Ofentse Dazela, the director of pricing at Africa Analysis, said greater adoption of 5G services would probably happen sooner than 2023 in SA, especially in the residential market fuelled by households that are in and around the big metro areas.

“Currently, operators such as Vodacom are building mobile infrastructure that is 5G ready and they should be able to commercialise this service as soon as they can access additional spectrum,” Dazela said.

“Moreover, Rain’s increasing effort to expand its 5G network, as well as Vodacom/ Liquid Telecom SA 5G wholesale partnership are among the ongoing initiatives that will further expedite early adoption of 5G services.

“In terms of mobile-based services, many consumers residing outside urban areas will probably continue to be serviced through 3G and 4G beyond 2023.”

Affordability will be a key challenge for SA’S mobile operators