South Africans saying goodbye to phone calls

Voice service revenue earned by mobile networks in South Africa in 2020 is expected to halve in value by 2028.

This is according to the latest Voice Services and UC&C report from research and advisory firm BMI TechKnowledge (BMIT), which shows that revenue from the service has decreased by more than R14 billion in the last four years.

This drop is due to the increased uptake of communication applications, such as WhatsApp and Microsoft Teams, says BMIT managing director Chris Geerdts.

Mobile voice revenue sat at R46.8 billion in 2020 and dropped to R32.5 billion in 2024. BMIT predicts this number will decrease by another R10 billion over the next four years to R22.5 billion, which it says is in line with global trends.

Fixed voice revenue has also declined significantly over the past four years, decreasing by nearly 50% from R8.6 billion to R4.5 billion.

This decrease is expected to slow down, with revenue expected to sit at R3.1 billion in 2028, 64% less than the eight years prior.

“The drop would have been more substantial were it not for the government sector, which, whilst embracing platforms such as Microsoft Teams, has also been slower in transitioning away from traditional voice usage,” said Geerts.

The report expects the Unified Communications and Collaboration (UC&C) market to nearly triple its revenue over the eight years, from R1.5 billion to R4.3 billion.

UC&C refers to platforms like Microsoft Teams, WhatsApp, and Slack that integrate various tools, such as messaging and video conferencing, into one application.

The report estimated that revenue from UC&C in 2024 was around R2.9 billion.

“WhatsApp is the most popular application for daily communication by individuals and smaller businesses, with its compelling offer of free calling and messaging and group communication functionality,” Geerdts points out.

Due to its high penetration in the South African market, he says businesses increasingly use the messaging platform to communicate with customers.

“With smaller companies, this may be one-on-one interaction, whilst larger companies are increasingly taking an omnichannel approach to their customer interaction,” according to Geerdts.

The report also notes the increased migration to cloud-based private branch exchanges (PBX), which refer to business telephones that allow for multiple inbound and outbound lines, call routing, and voicemail.

BMIT listed Microsoft Teams as the most popular of these platforms for business uses, estimating 2.2 million activations by 2028.

Others include Google Workspace and Zoom.

Geerdts points out in the report that while numerous international competitors exist in the market, several local service providers have created business-to-business communication platforms.

Local developers have also created omnichannel customer interaction platforms that allow businesses to provide a better customer experience while also significantly improving efficiencies.

Seeking other sources of revenue

While traditional forms of revenue like that earned from voice services are decreasing and mobile data prices are becoming more competitive, networks are looking elsewhere for growth.

One of these streams is financial services, which Vodacom and MTN offer their customers.

By doing so, the operators can leverage their extensive footprints, established digital platforms, recognisable brands, and value-adds like airtime and discounts to reach and acquire customers quickly.

Vodacom offers four levels of VodaPay wallets — Entry, Lite, Essential, and Pro — for varying payment, money transfer, and cash withdrawal services.

All four wallet levels have no monthly fees and are available to non-Vodacom customers.

Withdrawing money can be done through a “Cash out voucher” in the app, where the user must also select their preferred withdrawal channel.

MTN MoMo is similar to VodaPay in many respects. Like VodaPay, it has no monthly charge and is available to non-MTN customers.

It also works through a mobile app but has one key differentiator — a card that can be used to make tap payments locally or internationally.

The operator has signed an agreement with Mastercard — which took up a minority shareholding in MoMo in early 2024 — to offer all its customers a free virtual card and physical companion card.

This allows MoMo customers to make payments at regular terminals that support Mastercard by tapping or inserting their cards.

Customers can deposit money into their MoMo wallet through a bank card payment or Ozow EFT.

To withdraw cash, customers can EFT money from their wallet to a bank account.