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    Home » News » Internet access in SA worth R68,5bn by 2020

    Internet access in SA worth R68,5bn by 2020

    By Staff Reporter22 September 2016
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    Vicki Myburgh
    Vicki Myburgh

    Providing Internet access in South Africa will generate R68,5bn in revenue for service providers by 2020, up from R39,4bn in 2015, according to a new research report by PricewaterhouseCoopers.

    PwC’s Entertainment and Media Outlook: 2016-2020, published on Thursday, shows the bulk of revenue for Internet access will come from mobile services. Mobile will make up R61,6bn of the total by 2020 (2015: R34,8bn), with fixed services generating R6,9bn (2015: R4,6bn).

    Internet access revenues are expected to increase by 74% in the six years to 2020, accounting for an ever-greater proportion of entertainment and media spend,” the PwC report said. The growth will be underpinned by the fact that broadband, both fixed and mobile, is becoming an “essential utility”.

    “Though the forecast compound annual growth rate of 11,7% is lower than previously predicted, this still makes Internet access by far the largest contributor to total entertainment and media spend.”

    The report said the 11,7% annual growth figure is comparable to growth numbers in leading developing markets in Asia and Latin America.

    Coverage and take-up of fixed broadband services will improve considerably in the next few years, PwC said. However, mobile Internet access adoption will also continue to expand rapidly. By 2020, mobile access will generate 90% of total Internet access revenue in South Africa, up from 88% in 2015.

    The growth in mobile, PwC said, will be driven by improving network coverage, and cheaper handsets and data plans. “Smartphone connections in South Africa are forecast to grow by around 160%, from 24,8m in 2015 to 64,9m in 2020…”

    The growth in Internet access in South Africa is helping fuel growth in Internet advertising. Total online advertising spending grew by 23,6% in 2015 to reach R3,8bn. By 2020, this figure will rise to R8,2bn — a compound annual growth rate of 16,9%. The Internet’s share of total advertising spend will increase from 9% in 2015 to 15,6% in 2020, it said. By then, the Internet will be the second largest advertising platform in South Africa after television.

    The PwC report presents annual historical data for 2011 to 2015 and annual forecasts for 2016 to 2020 in 11 entertainment and media segments for South Africa, Nigeria and Kenya. They are the Internet, television, filmed entertainment, videogames, business-to-business publishing, recorded music, newspaper publishing, magazine publishing, book publishing, out-of-home advertising and radio.

    Aside from Internet access, the report predicts that growth will also happen in videogames, filmed entertainment and television.

    “As Internet revenue continues to rise, the forecast for newspaper and magazine circulation is on the decline as consumers migrate from print copies to free online alternatives — and aren’t as yet moving to paid digital formats in great numbers,” said PwC Southern Africa entertainment and media industry leader Vicki Myburgh.  — © 2016 NewsCentral Media



    PriceWaterhouseCoopers PwC Vicki Myburgh
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