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The SA mobile market today

Explore the current state of the South African mobile market, recent trends, and future subscriber growth. Learn about the key drivers of growth and the strategies and views of operators in a pending era of liberalisation and open competition.

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The SA mobile market today

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  1. The SA mobile market today “A new chapter in the growth story” Robert Pasley Director Corporate Strategy Vodacom Group (Pty) Ltd

  2. A new chapter of growth 1. Review of the mobile market today 2. Recent new trends in growth 3. Future subscriber growth in South Africa 4. Key drivers of growth

  3. Future plans, strategies and views of the future from the operators pending liberalisation and open competition • Mobile market ‘liberalised’ in 1994 • Competition from the launch of the networks • Additional competition from November 2001 • No further liberalisation pending

  4. A new chapter of growth 1. Review of the mobile market today 2. Recent new trends in growth 3. Future subscriber growth in South Africa 4. Key drivers of growth

  5. 3 national operators • Competition fuelling growth • 12 million subscribers • 28% penetration of total population • Maturing market - highly sophisticated • Recognisable leading consumer brands - innovation and leading products Setting the stage

  6. A new chapter of growth 1. Review of the mobile market today 2. Recent new trends in growth 3. Future subscriber growth in South Africa 4. Key drivers of growth

  7. Recent trends - a new chapter of growth • Stabilising ARPUS • Increasing levels of usage (MoU) - key tariff segments • User acceptance of data - SMS providing the stimulus • Alternative avenues for revenue growth - holds promise • Continued fixed line substitution • Mobile data applications - GPRS platform • Access share of corporate ICT spend • The mobile office - SOHO and SMME

  8. A new chapter of growth 1. Review of the mobile market today 2. Recent new trends in growth 3. Future subscriber growth in South Africa 4. Key drivers of growth

  9. The importance of subscriber numbers • Access • Universal and affordable provision • Wide range of services for economic growth • Progress towards universal provision • Economic growth • Industry growth

  10. 20 18 16 14 12 10 8 6 4 2 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Actual Vodacom MTN Analyst SA subscriber forecasts to 2008 Vodacom’s SA Mobile forecast, incl. AIDS effect 2008: 19 million Actual: September 02: 12 million Analyst 2008: 16,8million MTN’s 2008: 14,5 million Actual: March 02: 10.8 million

  11. Driven by affordability studies • Not only conventional LSM analysis • Across individual income segments • Determines penetration levels / income segments • Benchmarked against other market’s penetration levels: • GDP / capita and Gini coefficients adjustments • Relatively accurate Vodacom’s subscriber forecasts models

  12. SA CELLULAR PENETRATION / INCOME GROUP R1-R499 Reported Base R500-R599 100% R600-R999 90% R1000-R1399 80% R1400-R1999 R2000-R2999 70% R3000-R4999 60% R5000-R7999 50% R8000-R11999 40% R12000-R19999 30% R20000+ 20% Unemployed 10% Housewives Students 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Rich Kids 10 -16 yrs 19 million subscribers by 2008 SA Subscriber saturation expected at around 19m Subs in March 2008 Penetration = 39,2% of total SA population. Percentage penetration

  13. 8,000,000 400 394 350 7,000,000 358 300 6,000,000 250 266 5,000,000 200 208 4,000,000 182 179 150 3,000,000 100 2,000,000 50 1,000,000 0 1998 1999 2000 2001 2002 Sept 2002 Stabilising voice ARPUs Subscribers ARPU

  14. 440 Contract 390 340 290 AMOU 240 190 140 Prepaid 90 40 0 Aug-02 Sep-02 Jul-00 Jul-01 Jul-02 Jul-99 Jan-00 Jan-01 Jan-02 Apr-99 Apr-00 Apr-01 Apr-02 Oct-99 Oct-00 Oct-01 Total Contract Prepaid Increasing MoU across key tariff packages

  15. A new chapter of growth 1. Review of the mobile market today 2. Recent new trends in growth 3. Future subscriber growth in South Africa 4. Key drivers of growth

  16. 300 275 250 225 200 Million SMS's per Month 175 150 125 100 75 50 25 Jul-00 Jul-01 Jul-02 Nov-00 Nov-01 Jan-00 Jan-01 Jan-02 Sep-00 Sep-01 Mar-00 May-00 Mar-01 May-01 SMS activity - a taste of things to come In excess of 300% increase since end 2000

  17. Technology overview - ready for launch • GSM Technology Mature and Reliable • Low cost operation • MMS messaging set to take off by 2003 • Satisfy both: • Consumer Services & Entertainment demand • Corporate Services and Niche markets

  18. A new chapter of growth • Conclusion • Subscriber growth at stable ARPU • “Democratise Telecommunications” • New opportunities for growth: • SMS • MMS • Entertainment / Information services • Corporate data services

  19. THANK YOU

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