Updated: Aug 17, 2020
1. Continued concern around the economy.
2. Cloud adoption gains pace.
3. SD-WAN impacts MPLS market.
4. Death of copper extends alternative connectivity growth.
5. 5G downpour ahead.
6. National and Provincial Government spend on ICT will top R20 billion.
7. Software-defined everything.
8. The light is on spectrum.
9. AI embedded everywhere.
10. Streaming media marches on.
1. Continued concern around the economy
A survey conducted by BMIT in October last year found that 72% of ICT industry executives are seriously concerned with the prospect of economic downturn in South Africa and the impact that it could have on their businesses, while 60% are still concerned about political uncertainty, the same level that was observed before the 2019 National Elections
2. Cloud adoption gains pace
With the local Microsoft Azure cloud officially live as well as the Huawei cloud being available locally, the AWS and Oracle clouds coming soon, and VMWare partnering with everyone, cloud is rapidly gaining pace in South Africa and is set to grow to R23.6 billion by 2023.
Data domicile and latency as objections are something of the past and conversations have moved from whether or not to adopt cloud to how cloud is going to be implemented.
3. SD-WAN impacts MPLS market
Software-defined wide-area networking (SD-WAN) is a major disruptive force impacting players in the traditional IP VPN space. Initially, the primary impact is price pressure as large MPLS users negotiate reductions in orchestration layer charges while simultaneously demanding higher underlying transmission capacity. However, a few large customers are ripping and replacing their MPLS VPN with SD-WANs.
4. Death of copper extends alternative connectivity growth
Driven by open-access facilities, broadband growth is re-invigorated as Telkom actively phases out its copper network.
In the residential segment, FTTH revenue grows by 20% to reach R4.9 billion in 2020, while Telkom continues to drive strongly into the fixed-mobile market with its LTE-A services.
5. 5G downpour ahead
Rain’s 5G deployment was well in line with global trends: the timing was similar, the service offered (fixed-wireless broadband access) was the most common (if not the only) 5G service offered worldwide, and the most common spectrum used was the same ‘golden band’ (3.5GHz) available to Rain.
The sheer pace of this 5G deployment globally forced many analysts to revise up their forecasts in 2019.
Rain’s compelling, uncapped offer competes squarely with fibre, especially as it broadens coverage and extends to other cities. Liquid Telecom, supported by Vodacom, may emerge as a strong contender, although they are well behind in rollout.
South Africa will see 5G smartphones in the market soon, but will sadly not have a practical use for these phones in 2020, as the two large mobile operators lack requisite spectrum to provide viable mobile footprint.
6. National and Provincial Government spend on ICT will top R20 billion
The South African national and provincial government’s ICT spend was estimated to have been just over R19 billion in 2018/2019, and is projected to grow at around 3.8% to reach R21.4 billion in 2021/2022.
The top five ICT spenders account for 71% of total ICT spend of the 40 national departments, but the dominance that this group held in the past few years is slowly eroding, as 17 departments now spend over R100 million annually on ICT, comprising 92% of national ICT spend.
7. Software-defined everything
Hyper-Converged Infrastructure (HCI) is a key trend in the hardware market. The main purpose of HCI is to provide a single consolidated unit or appliance that has all the necessary functions including compute, network and storage.
This will lead to simplified infrastructure deployments and a lower total cost of ownership.
There will also be an acceleration from hardware-based technology to software-based systems, a computing approach that relies on a virtualised infrastructure delivered as a service through software. This will enable the leveraging of HCI.
8. The light is on spectrum
The country remains starved of wireless spectrum – needed to bring down pricing, speed up LTE capabilities, and expedite 5G deployment.
ICASA’s process for assigning spectrum and appointing a consortium to roll out the WOAN has taken a possible step forward, with the window for responding to draft proposals on the process now in, and in the next month or two, South Africa will know how convergent industry thinking is around the current plans.
Whatever transpires, it is critical for that spectrum to be made available to operators soon.
9. AI embedded everywhere
Organisations are becoming more open to utilising emerging technologies as they seek to innovate, remain competitive and even disrupt incumbents.
While hyper-scale's remain at the forefront of artificial intelligence and machine learning, service providers of all sizes are looking to embed it wherever possible in their offerings, to give their customers the benefit of assisted decision making and automation.
10. Streaming media marches on
A key trend for 2020 will be the continued growth of video-streaming services and the usage of those platforms in South Africa.
Over the past 18 months, we have seen an increase of over 35% in usage of paid-for streaming services like Netflix and Showmax, with over 80% of those with fibre Internet at home saying that they use at least one streaming service.
Meanwhile, more than 50% of Internet-connected consumers say that they are using YouTube regularly on their mobile devices.