By MTHULISI SIBANDA
JOHANNESBURG, (CAJ News) – END-user spending on communications services in South Africa is forecast to total R122 billion (9,34 billion) in 2017, representing a 0,7 percent increase from the previous year.
This is according to Gartner Inc, the American research and advisory firm.
“The forecast growth rate is slight, mainly due to shifts to less expensive legacy service offerings as competition heats up,” said William Hahn, Principal research analyst at Gartner.
“It’s likely to remain fairly flat in 2018 as increased competition in the access services segment erodes prices as fast as, or faster than, adjacent market revenues replace it.”
This slight growth in spending on communications services South Africa in 2017 compares favorably with the global market, which is forecast to show a 0,2 per cent decline.
South African providers achieved good growth overall in 2017, following some tough years, including a particularly difficult 2015.
They achieved overall revenue growth, although growth in the average revenue per user slowed, due to new cheaper devices coming onto the market and legacy offerings encountering fierce competition.
“It’s vital that these providers move into adjacent areas that can produce synergies with existing access services,” said Hahn.
This would enable them to climb the value chain by offering related support, consulting, digital media content and more, either through direct acquisitions or partnerships.
“The connected-home, smart-city and automotive sectors are expected to exhibit solid growth, but not every provider will be well-suited to them,” said Hahn.
– CAJ News