The South African telecommunications industry has seen a R10 billion (22%) drop in investment since 2018, a report on phase one of Operation Vulindlela states.
Released by the National Treasury and the Presidency this week, the report cites an Independent Communications Authority of South Africa’s (Icasa) questionnaire as its source for the data.
According to the report, South Africa’s telecommunications industry invested R46.9 billion in 2018.
This number included mobile communications services, expansion, infrastructure, fixed broadband services, maintenance, fixed telecoms services, and other communications services.
Investment in the industry consistently decreased over the next three years, reaching R34 billion in 2021.
It then increased to R39.8 billion in 2022, which was said to be driven by expansion and maintenance efforts.
Radio frequency spectrum that was made available for auction — generating R14.47 billion for the national fiscus — also contributed to this increase.
This allowed mobile network operators to bolster their 4G and 5G coverage.
When the report was prepared, R5.8 billion of this was still to be paid due to the remaining spectrum being held up in analogue transmissions and outstanding operator settlements.
However, much of this has been resolved, with Vodacom and MTN reporting that they paid the outstanding amounts to Icasa after TV broadcasters released their spectrum assignments.
Vodacom invested R11 billion into capital expenditure in the 2022/23 financial year to help with 5G roll-out and help its 4G coverage to reach 98.5% by March 2023.
MTN also made significant investments over R8 billion in 2022 to bolster its 5G infrastructure and expand their network to cover 1,500 sites.
Both networks also invested heavily in network resilience to ensure they remain online during higher stages of load-shedding.
After this, telecommunications investment declined by 8% to R36.6 billion in 2023.
Treasury said this was attributable to the 79% decline in the expansion of new infrastructure.
However, this is expected to grow this year due to broadcasters vacating the frequencies above 694MHz as part of South Africa’s migration to digital terrestrial television, allowing spectrum to become available for mobile network use.
Telecommunication investment breakdown
The graph below shows the breakdown of telecommunication investment made over the past five years.