COMMUNITY TELEPHONE SERVICES MARKET STUDY

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COMMUNITY TELEPHONE SERVICESMARKET STUDY
Tebogo Khaas28 August 2006
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Introduction

• Three underlying drivers are critical to
  understanding the need for the information
  included in this study
• The need to provide telecommunications access and
  services to under-serviced communities as key to
  delivering on its developmental objectives
• Mandatory service obligations such as Community
  Service Telephones (CSTs)
• The need to evaluate the efficacy and need for
  further intervention

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Objective Scope of Study

• The objective and scope of the study was to
  evaluate the following
• The current extent of CST penetration within
  South Africa
• The future requirements for CST within the
  territory and
• The propensity of the market to absorb additional
  CSTs of the nature as proposed for the operators
  (roughly 90 000).

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Project Scope Methodology

• Due to the original understanding based on a
  1-month time constraint, the project scope was
  limited and consequently, this is a high-level
  market study confined to larger geographical
  areas.
• The following caveats have been identified for
  this study
• The total sample size of 150 telephone interviews
  provided valuable information about the sector
  but the study should not be seen as being
  representative of the industry in total.
• The outputs of the study should be seen as
  guidelines to inform policy development and not
  an exhaustive source of industry information.
• The research model used consisted of three major
  phases. During the first phase, an analysis of
  the level(s) of penetration by CSTs within the
  territory was made. During the second phase, an
  analysis of the need that exists for telephone
  services was made.

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3.1 Executive Summary - Data Analysis
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Average Annual Communication Spend as Percentage
of Total Average Annual Household Income
Source Statistics South Africa
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Average Annual Communication Spend as a of
Average Annual Income Urban vs. Rural Households
Source Statistics South Africa
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Households per Province with no access to a
Telephone
Source Statistics South Africa
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Percentage of Households which have no access to
Telephones Provincial Breakdown
Source World Development Indicators Database
World Bank
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Top 20 Municipalities - Households with no access
to telephones
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Demographic breakdown of South Africa Area
(Square Kms)
Source Statistics South Africa
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Population density figures growth in population
per province
Source Statistics South Africa Based on 1996
2001 Census Data
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Correlation between income per household and
households without access to phones
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Correlation between income per household and
households without access to phones

• Previous figure confirms the correlation as
  identified between the average income per
  household per Municipality and the percentage of
  households per Municipality that do not have
  access to telephone services.
• Municipalities where the average households earn
  relatively low income per month tend to have more
  households without access to telephone services.
  This is illustrated in previous figure where it
  can be noted that on average when the average
  income per household per Municipality spikes
  upwards, the percentage of households without
  access to telephones shows a relatively similar
  downward spike.

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Main Findings

• From the analysis obtained from the study with
  all its limitations, the following findings have
  been arrived at
• Urban areas currently enjoy the highest CST
  penetration compared to rural areas. Due to their
  relatively higher disposable income, these
  generally seem to enjoy much preference in
  respect to CST rollout than the rural or
  peri-urban areas. Poorer provinces lag behind
  those with higher household income in terms of
  penetration of CSTs per capita. Long term
  sustainability and business viability are cited
  as the main reason for this phenomenon

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Main Findings

• Based on the sample interviews made, future
  requirements of CSTs within the territory remain
  strong in spite of the serious competition posed
  by the growth of public telephone service
  operators and
• The analysis suggests the market can absorb
  additional CSTs of the nature as proposed for the
  operators. However due the serious competition
  faced by CSTs in their current form, focus could
  shift to proving more data services than voice
  services at existing and new CST installations as
  the demand for data services is likely to grow
  exponentially, especially in under-serviced
  areas, in line with national trends and the
  growth in the black middle class.

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Thank You