Telecoms to push into parallel markets

2018-01-28 06:00 - Justin Brown
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Johannesburg - This year, local telecommunications providers will most likely continue their push into parallel markets such as entertainment services, Africa Analysis managing director, Dobek Pater said during an interview.

“Vodacom and MTN, but Vodacom to a greater degree, have been moving into financial markets through insurance products and mobile money – including mobile banking products. This is small revenue for the mobile providers, but it will continue to expand,” he added.

Local data costs are likely to decrease this year.

The question is whether there will be a paradigm shift in local data costs.

Key to this will be a study that the Competition Commission has launched.

Pater said he expected the competition watchdog to publish an outcome of the study possibly in the first half of the year.

“I suspect there will be pressure on [the commission] to try and prove that data prices are too high in South Africa – in relation to disposal income levels – and are a hindrance to socioeconomic development.”

“As smartphones penetrate deeper into the market, people will consume more data.”

Pater predicted that in three to five years South Africans may no longer be paying for voice services. Instead, telecommunications data might be the main service paid for.

There is the prospect of greater local mobile capacity as major players may start to pilot fifth-generation (5G) telecommunications this year, Pater said.

“We will see some 5G pilot developments. Both MTN and Vodacom have announced partnerships with equipment vendors to start looking at 5G,” he said.

Earlier this month, MTN and Ericsson announced the first 5G technology and applications trial in Africa, starting in the first quarter of the year.

Late last year, Vodacom said it would trial 5G technology with Nokia.

Fifth-generation telecommunications aims for higher capacity than fourth generation (4G) and allows for higher density of mobile broadband users and massive machine communications.

Pater said telecommunications operators would continue to expand their 4G services.

However, lack of a wide telecommunications spectrum continues to plague the sector.

There will be a push for infrastructure development and service provision for the internet of things (IoT).

IoT is a network of infrastructure that allows for the connection of physical devices, vehicles, home appliances and other embedded items to transmit data.

There will also be a greater push to roll out fibre, which is used to transmit telephone signals and for internet communication.

Only 20% to 25% of houses where fibre is accessible subscribe to provider services, Pater added.

Digital subscriber lines (DSL), a system of technologies used to transmit digital data over telephone lines, will be increasingly replaced by fibre.

Long-term evolution-advanced (LTE-A) networks are another form of broadband that is on the rise. These networks can deliver data at incredibly high speeds of up to 1GB per second.

“LTE-A is a competitor to fibre and DSL,” Pater said.

“LTE-A will supplement fibre. As a technology with lower cost of deployment. It can have wider geographic coverage than fibre,” he added.

Pater said that South Africa has seen quite a bit of development relating to data centres.

These centres are facilities used to house significant computer systems – such as telecommunications and storage systems.

In December, Teraco completed Africa’s first hyperscale data centre in Bredell, near Kempton Park in Gauteng.

“There will be a bigger push to sell space at data centres,” Pater said.

“Microsoft Azure and Amazon Web Services are going to be putting down servers at Liquid Telecom premises.”

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