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Rudolph Muller

Rudolph Muller is the editor at MyBroadband and covers telecoms and broadband news. Rudolph comes from an academic background, but left the University of...

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Cellphone penetration in South Africa has gone up, but average spending has continued to dwindle as a result of various pressures on consumers.

According to the latest figures by the SA Advertising Research Foundation, 67% of adults in the country have cellphones.

This was an improvement from the previous survey, which showed that 60.5% of South Africa had cellphones.

In contrast, the average spending per user has dropped to R169 a month, from R186 previously.

Claire Welch, technical support executive at South African Advertising Research Foundation, said: "Cellphones are becoming very accessible, but at the same time people aren’t able to spend the large amounts that they used to.

"Poorer people can now more easily afford cellphones, but their lower spending habits tend to bring the average spend down."

Cellphone operators have been experiencing similar trends, with higher numbers of subscribers joining, higher increases in pre-paid usage, lower average revenue per user figures and the shift to selling lower denomination recharge vouchers.

MTN, which historically targeted lower- to middle-income customers, experienced a 53% increase in subscribers, but revenue was only up by 35% for the six months to June 2008.

Vodacom, which caters to higher- end users – who favour contracts – showed a 13.1% increase in customers and a 14% increase in revenue in its latest interim results.

Denis Smit, managing director of research firm BMIT, said: "Cellphone prices in South Africa are high, and people here generally spend less than in other countries.

"With the state of the economy, all people are cutting back.

"Poor people will still spend on a cellphone. which for them is a necessity, but they talk for shorter periods, meaning lower average spending per user."

The survey also showed that pre-paid cellular dominated the market with a steady growth, while the number of contracts was decreasing proportionately.

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