by Frost & Sullivan's Information and Communication Technologies Business Unit Leader for Africa, Birgitta Cederstrom

The year of SMART

The passing year was a year that was, for most South African companies, a very challenging financial year. Budgets were cut to the bone, expansion plans were put on hold and, overall, the year of 2011 was a rather cautious year with no big bold movements. We predict that 2012 will continue in the same cautious fashion as 2011 and we therefore call it “the year of smart”. Companies will better utilise their existing technologies and continue to find ways in which to lower CAPEX and OPEX costs when implementing newer IT and telecoms solutions.

Frost & Sullivan has identified the following areas as key predictions for 2012:

Green telecoms will take shape in the form of energy efficiency, specifically the use of renewable energy minimising carbon emissions. With escalating costs for energy, companies will adopt smarter green technologies in order to cut costs. Frost & Sullivan has noted a higher adoption rate for Data Centres, especially in the enterprises and SME sector throughout 2011. The South African DC market is currently valued at R2.3 billion 2011 and is expected to continue with double digit growth in 2012. Cloud and virtualised solutions will enable companies to better utilise and implement smarter data centre solutions throughout 2012.

Data Centre service providers are implementing alternative smart solutions, especially around cooling and energy solutions. The industry is already in a wave of transformation with new initiatives, such as ocean water being used for cooling strategies.

Frost & Sullivan also predicts that carriers will adopt renewable energy and energy efficient sources to lower OPEX. For the solar and wind powered base stations, operators save OPEX by not having to re-fuel diesel generators, which would otherwise be required. Operators will also not have to rely on imported energy, thereby avoiding the impact of currency fluctuations on the cost of diesel.

With over 8 million smartphone users in South Africa, the trend to get more consumers and enterprises adapting to smart will continue. Vodacom's CEO, Peter Uys, has a bold target to achieve 25 million subscribers using smartphones by 2013. Perhaps unrealistic, but the majority of South African mobile users will in some form, or other, use smart within the next 24 months, as technology prices are down and interest in the usage of application services is high. Tablets will continue to extend its footprint in the South African market and Frost & Sullivan predicts that many consumers will replace desktops and laptops with tablets as a more efficient platform to operate on.

Even though the uptake of social media and mobile advertising was sluggish in 2011, Frost & Sullivan expects a significant uptake in 2012, due to South African consumers' market readiness and the desire to follow companies they relate to on facebook and twitter. Furthermore, mobile payments are expected to have significant growth, following the success of the uptake of the solution by Safricom in Kenya.

Introduction of IPTV, and Video on Demand services, should also occur in 2012, especially considering the recent announcements made by ICASA. The launch was expected in 2011, which has now been postponed to this year. Service providers, such asTelkom, would be most suited to offer IPTV. Global trends, such as TriplePlay and QuadPlay, are a given by former incumbents in mature markets in order to boost revenue and services to its consumers and enterprises.

The South African government has taken initiatives, to date, to deploy smart eGovernment solutions, and Frost & Sullivan predicts a continued roll out of initiatives will occur during 2012. eGovernment initiatives, such as eEducation and eHealth, will form part of working smarter methods for government, following mature markets eGovernment strategies.

Samantha James
Corporate Communications – Africa
P: +27 21 680 3574
F: +27 21 680 3296
samantha.james@frost.com

http://www.frost.com