South Africa’s information and communications technology (ICT) industry has made headway in returning to its pre-pandemic annual growth levels of 5% to 6%. Still, the bounce-back varies significantly between different subsectors.
This is according to BMIT’s ICT Market Overview and Sizing Report, which attributed the patchy growth to structural changes in the industry.
The ICT industry observed the growth despite many business customers still being forced to manage their budgets carefully as they are also recovering from the pandemic’s effects.
BMIT’s research found that a quarter of the business customers it surveyed said their revenues were still down compared to 2019.
However, despite the struggles of such business customers, one-third of mid-sized companies indicated that they had observed some form of growth compared to pre-pandemic levels.
Overall, spending on IT hardware, software, and services bounced back substantially in 2021 from the dreary spending levels in 2020.
However, spending has declined when it comes to the business telecoms sector.
The overall ICT revenue growth in 2021 of 3.7% is below the global average, but some subsectors — like hardware — observed revenue increases of up to 8.4%.
Spending in the software sector also increased significantly, resulting in revenue growth of 7.5% year on year. The telecoms sector experienced the worst revenue growth in 2021 at 1.2%.
According to BMIT, the telecoms subsector’s growth was dragged down by dwindling voice markets and mixed growth in the mobile sector.
This is attributed to strong growth in fixed broadband services but declining mobile voice and moderated mobile data revenue due to price pressure.
The dreary growth in the telecoms sector occurred despite robust growth of 17.5% in the residential broadband market.
BMIT expects the rollout of fibre in the country to be ongoing, adding that fibre-to-the-home services are now moving quickly onto lower-income segments.
Fibre network operators targeting these lower-income regions include Vuma Reach, Openserve Web Connect, and Frogfoot Air. They offer lower-cost uncapped fibre packages in such areas.
In addition, fixed-mobile broadband services offer a useful gap-filling function for areas that don’t yet have fibre infrastructure and don’t have access to copper-based services.
This is because Telkom’s end-of-life plans for its copper network opened the door for various suppliers to migrate DSL users to fibre, fixed-wireless, and fixed-mobile connections.