South Africa ranks 23rd in telecommunications development in the world. The country has approximately 4,92 million installed telephones and 4,3 million installed exchange lines. This represents 39% of the total lines installed in Africa.

National operator Telkom has met and exceeded its roll-out targets of over 1,6 million lines, 175 488 more than the cumulative target. South Africa has a large transmission infrastructure, necessitated by the country's vast geographical area of 1,2 million km. Covering about 156 million circuit-kilometres, the transmission network constitutes the backbone of all telecommunications services.

The network is almost wholly digital. Digital microwave and optical fibre serve as the main transmission media for the inter-primary network, interconnecting all major centres.

The second network operator license will be issued in September 2004 to a consortium consisting of Nexus Connexion, Transtel, Esitel, WIP Investments Nine (trading as CommuniTel), Two Telecom Consortium and an equity stakeholder.

This will result in competitive pressure which should drive carrier costs down considerably. South Africa also has two international cable backbones and far greater technical resilience than many Asian countries, e.g. India and the Philippines

Although Telkom's monopoly has expired its right to provide basic services has simply been extended to include the second network operator and, in some cases, signal carrier Sentech. But as the second operator has not yet been licensed, Telkom remains the sole provider of services by default.

South Africa, with the operators Vodacom, MTN and Cell C, is the fourth fastest growing GSM (Global Systems for Mobile Communications) market in the world and is growing at a rate of 50% per annum.

Market size was 14,4 million users in February 2003 according to Cellular Online and this could grow to 19 million by 2006. Market Share is Vodacom (7,5 million), MTN (5,22 million) and Cell C (1 million). It says that the SA market is currently worth R23 billion and could reach R45 billion by 2004.

Value-adding cellular growth rate network operators provide services such as Internet connectivity, electronic mail, protocol conversion, data processing and access to global databases. Complemented by expertise in network design, implementation and management, this gives South Africa one of the most advanced telecommunication systems of all emerging markets.

According to a study released in 2002, 2,89m South Africans had access to the Internet at the end of 2001. This number will grow to around 3,1-million by the end of 2002. The Goldstuck Report: Internet Access in South Africa, 2002 reveals that 1 in 15 South Africans had access to the Internet at the end of last year. This figure is expected to grow to 11% by 2003. Internet usage in Africa as a whole is estimated to be 3,11 million.

Telecommunication costs tend to be comparatively expensive, as Telkom has had a monopoly in this market; however, since the second network operator license will be issued in September 2004, competitive pressure should drive carrier costs down considerably. At present, special concessions allow for outbound calls to be made to the UK at a cost of ZAR0.45c per call minute; however, minimum volumes are required. For lower volume work the rates are high at ZAR2.81 for an off-peak call to the UK and ZAR3.33 to the USA.




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