The number of mobile subscribers in South Africa is expected to increase to over 40-million by the end of 2007, however, with a mobile penetration of 87% in South Africa, the country may have reached a point where growth is likely to slow down to 2%, BMI TechKnowledge senior telecoms analyst Richard Hurst said at the launch of the company’s Communication Technologies Handbook 2007.

The South African mobile market has maintained its growth path and witnessed much activity over the past year, with the implementation of mobile number portability, as well as the arrival of the mobile virtual network operator Virgin Mobile South Africa, a joint venture with Cell C.

Mobile operators across Africa continue to focus on the “meat and potatoes” services of basic voice usage, but data services, such as 3G or HSDPA and GPRS are emerging in South Africa, which is seen as an early adopter of these technologies.

South African mobile operators focused on the roll out of 3G services, which allow faster entertainment downloads, in 2006, and continued activity in this market is expected to extend well beyond 2007.

The market has seen a somewhat aggressive surge in the roll out and uptake of the 3G-HSDPA-services driven largely by MTN and followed shortly thereafter by Vodacom, which cut prices by up to 60% for data on some packages.

“This made MTN and Vodacom cheaper than all the wireless broadband operators, including Sentech and iBurst, as well as being cheaper than Telkom’s most affordable ADSL service – however short-lived this price advantage may prove to be,” added BMI TechKnowledge.

South Africa was said to be poised for radical change in the telecoms market, with the introduction and licensing of the country’s second national network operator, Neotel, as well as the promulgation of the Electronic Communications Act (ECA), formerly known as the Convergence Bill, together with the Independant Communications Authority of South Africa Amendment Act 3 of 2006 and the implementation of certain competition enablers.

Neotel has launched its wholesale services, and corporate services, followed finally by residential retail services are expected to be launched by the end of 2007.

The handbook pointed out that the key issues facing the South African fixed-line market in the future would be the proposed unbundling of the local loop, which the Minister of Communications Dr Ivy Matesepe Casaburi noted should be implemented as a matter of urgency but completed by the end of 2010. However, the more likely scenario would be a partial unbundling of the local loop with preference granted to the new entrant Neotel.