Mobile Phones, the Internet, and South Africa

The Institute of Race Relations’ (IRR) Centre for Risk Analysis has published a study that shows the dramatic increase in mobile phone usage in South Africa and its importance as a portal to internet usage. During the 2000-2014 period, fixed line subscriptions per one hundred people dropped by 38 percent while mobile phone subscriptions increased by 702 percent. The increase affected all races, but the growth is especially striking among ‘Coloured’ and ‘Indian’ South Africans. For Black South Africans it was 405.3 percent; for ‘Coloureds’ it was 763.6 percent; for ‘Indians’ it was 708.3 percent; for Whites it was 470.6 percent. The lower rate of increase among Blacks may reflect the higher levels of poverty among that demographic. Among whites, the lower level may reflect that many of them have long had access to land lines and to cell phones, resulting in a lower rate of usage growth.

The IIR predicts that mobile phones will accelerate a shift toward online retail. It also suggests a growth in social media’s influence on politics.

The IRR report shows that the South African cell phone market is dominated by three companies: Cell C with a market share of 25.1 percent; MTN, with 33.2 percent; and, Vodacom, with 38.5 percent. All three are South Africa based. Cell C has an important Black Economic Empowerment (BEE) dimension, a government-sponsored program to provide access for blacks to the modern economy; it also has a focus on providing low-cost service. British investors have a large stake in Vodacom. MTN, headquartered in Johannesburg, has world-wide operations.

Telecommunications is an important part of the ‘new’ South African economy, even while the ‘old’ economy based on mining continues to decline.