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Who's afraid of a little extra competition?IT will be tough going for a third cellular network operator in South Africa, says SA's largest cellular network, Vodacom. The company says the newcomer is likely to snatch only a 5% share of the market by the turn of the century. A study is under way to determine whether a third network will be feasible but the results are expected only in a year. The telecommunications sector has been in the headlines recently following several major policy and strategy announcements. An important one for the cellular industry came from Post and Telecommunications Minister Jay Naidoo, who said that the newly formed SA Telecommunications Regulatory Authority, or Satra, would consider the feasibility y of a third network, probably aimed at rural and disadvantaged communities. "We think it's a welcome development," says Joan Joffe, Vodacom's group executive for corporate affairs. "The extra competition that a third network operator will generate will be good for all players in the sector, particularly consumers who will benefit from lower prices and a wider range of technologies." But Joffe warns it will be tough going for any new network operators and newcomers will achieve only a 5% market share by the year 2000. Vodacom, which currently has around 59% market share, is fast approaching its 550 000 subscriber mark. According to forecasts by Dataquest and BMI-T the total number of GSM subscribers in South Africa will reach 3-million before the turn of the century. Vodacom expects to maintain its dominant market share position well into the future. "The market is far from saturation point," says Joffe. "With cellular penetration in South Africa at only 2%, there are enormous possibilities for growth. Market segmentation has begun and new layers of consumers are beginning to find that cellular is affordable and is addressing their particular requirements. "The introduction of our pre-paid service has been a phenomenal success, and actual numbers of subscribers has far outstripped forecasts. Security is still a key driver of cellphone purchases," she says. Joffe says Vodacom is in the process of launching a host of value-added services which will give subscribers access to a multitude of services via their cellphones. "While basic telephony will continue to be the main requirement of subscribers, the convergence of cellular, E-mail, Internet and voice mail is highly significant, and is a key driver in our value-added services programme," says Joffe.
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