Africa & Middle East Market Perspective / Vol. 8, Issue 14, June Edition

South Africa’s mobile and fixed line penetration rates, at 92% of the population and 25% of households, respectively, in 2007, are the highest in Africa, but fixed broadband penetration is still extremely low at only 2.2% of households. However, our converged services forecast shows that broadband penetration is about to take off, with residential fixed broadband alone forecast to grow at a CAGR of 40% from 2007 to 2013, reaching 15.5% by the end of the forecast period. It is not surprising that South Africans, like their peers in the developed world, would be interested in broadband services, but this broadband boom will look very different from those that have preceded it in developed markets: for many South African users, broadband will be mobile from day one. We expect that by 2013, 63.1% of South Africa’s broadband subscribers will use mobile broadband, rather than the fixed DSL technology that traditionally led the way in developed markets, and that mobile operators will be main beneficiaries of this lucrative new revenue stream.