Study: South Africa VOIP enters "early adopter phase"

27.06.2005
Von Computing SA

ICT market analyst BMI-TechKnowledge has a study that focuses on the changing voice services market in South Africa, against the backdrop of the latest liberalization of VOIP for VANS and ISPs.

Richard Hurst, analyst and co-author of the report, says that the market structure is still nascent and fraught with uncertainty -- the regulatory environment alone poses major uncertainties, and the position of the future SNO and relative strength compared to the incumbents and challengers such as budding virtual network operators as well as the traditional VANS players -- emerging network service providers (NSPs) or, at least, application service providers (ASPs), post convergence legislation, could best be described as a major wildcards at this stage.

"As an early prediction, VOIP revenues are expected to grow from R30 million (US$4.5 million) in 2005 to R630 million by 2009, representing 3 percent of all fixed-line voice revenues or, alternatively stated, only 0.8 percent of total voice, fixed and mobile combined," says Hurst.

The fixed-line voice services market has been relatively flat over the past two years, growing from R17.1 billion in 2001 to R20.1 billion in 2004, and is expected to grow slightly to R21.1 billion in 2009, representing almost flat growth. Growth in voice-calling revenues has in fact been negative in recent years, if the positive impact of dial-up Internet call charges is eliminated.

The residential sector will be a slow adopter of VOIP, considering the low penetration rate of broadband in homes. Even under an accelerated broadband scenario, relatively few SA households will have broadband in the short to medium term.

"Currently the local telecommunications market is in the early adopter phase of VOIP, although this is expected to change as network operators and enterprises begin to realize the benefits of the new technologies. However, we expect the impact to take up to three years to be truly felt -- with the exception of accelerated tariff rebalancing between international outgoing, national long distance and local calling rates," adds Hurst.