Research ICT Africa (RIA!) has published their 2006 South Africa Telecommunications Sector Performance Review. The tone of the fourth edition is worrying. The authors urge for measures that prevent South Africa from further lagging behind its natural competitors in terms of access to services, cost of usage and competitiveness.

The telecommunications sector in South Africa is not doing well. This is the clear message that speaks from the 2006 South Africa Telecommunications Sector Performance Review 2006 by RIA!. Once South Africa had the leading and trendsetting telecommunications sector on the Africa continent, now this position is slowly being challenged by other countries. Morocco already has more fixed broadband connectivity than South Africa and the Tunisia mobile market is now the fastest growing in Africa, besides the island states.
The fourth edition of the South African ICT and Telecommunications Sector Performance Review (SPR) seeks to measure and assess some of these market developments against national policy objectives such as access to services, cost of usage and competitiveness. It is not a conventional market analysis. These tend to be concerned with overall growth or growth of different market segments and the profitability of companies. This study is concerned with such data only as indicators of delivery on national objectives. So, for example, while the overall ICT sector in South Africa has continued to grow significantly in the last year, this review considers how this relates to improvement in penetration rates and costs of telecommunications to consumers and users and as a major business input, and to the introduction of new services for effective participation in the global economy.
The review is divided into eight chapters which take the reader from global policy and regulatory trends, through a detailed analysis of the sector in South Africa, to conclusions and recommendations to improve the sector performance.
The telecommunications sector is dominated by rapid technological and economical changes. Convergence of technologies has a revolutionising impact on the costs, scale and scope of service provision. Internet Protocol (IP) based technologies are able to offer new, innovating and low-cost services to the customers. This happens at a global level, and also affects the South African ICT and telecommunication sector. However, as observed by the authors of the SPR, the South African 'managed liberalisation' process has created a market that has only been opened up incrementally, with few opportunities to see the benefits of lower prices, service and billing innovation, and choice of services associated with open markets in other parts of the world.
The impact of this market structure on the development of the South African telecommunications sector is assessed in terms of penetration and pricing. While fixed-line growth is negligible, the growth of data services, particularly through the introduction of ADSL (Asynchronous Digital Subscriber Line), has been significant, despite the high costs associated with these services. Although these costs have come down in recent periods, they continue to be far above other lower to middle income countries and even developing countries such as Morocco. The mobile market grows astronomically, with subscriber numbers over 30 million. At the same time, interconnection and facilities leasing continue to be significant bottlenecks in the introduction of a fair competitive market and major contributors to the high input costs of telecommunications in business. On top of that, the exclusivity Telkom has over the SAT-3 landing station is making international bandwidth cost considerably more than its real cost. Although positive developments are taking place in the last year, serious regulatory action needs to be taken to improve the penetration and costs of telecommunication services in South Africa.
The report provides a wealth of information for who wants to understand the South African telecommunications sector. The sources of the information are well documented and presented with a large number of illustrative tables and figures. Market structure, access to ICT and pricing of different services and providers are covered in detail. However, the lack of a proper definition of the ICT and Telecommunications sectors can easily create confusion. Software and hardware industry, although important driving forces for innovation in the telecommunication sector, are not covered in the report.
In spite of the fact that the conclusions and recommendations in the last chapter mostly address the challenges for the sector in South Africa, they also provide important lessons for policy makers and regulators in other African countries. Many governments are in the process of implementing new policies and regulatory frameworks. In doing so they should learn from the events in South Africa and avoid similar pitfalls.