Nicole Rego

Johannesburg - South African fixed and wireless broadband connections are expected to reach over 3.3 million subscribers over the period 2007 to 2012, according to a report by ICT market research group BMI-TechKnowledge (BMI-T).

BMI-T added that the increase in connections represents a compound annual growth rate of 33% from this year to the year 2012.

According to its telecommunications analyst Fezekile Mashinini, DSL subscribers are projected to account for 45% of the total market over the forecast period and that wireless, along with fixed and mobile, would account for 55%.

Mashinini also said that DSL currently accounts for 49% of the market share, but that it was losing some of its market share to the fast growing HSDPA wireless service provided by mobile operators MTN and Vodacom, adding that HSDPA's forecast compound annual growth rate is 35% over the period.

Mashinini said that the market has witnessed an unprecedented reduction in services prices during 2007, which has fuelled the demand for broadband services in both residential and business segments.

"Price reductions are putting pressure on the broadband service provider's margins, and even though the increased demand will lead to increased revenues, still BMI-T expects to see a steady shift by the service providers towards improving their service offerings to be more attractive by selling triple play services (voice, data, video), and other value-added services, in a bid to improve ARPU (average revenue per unit) levels," Mashinini concluded.

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