Gartner’s Communications Analyst William Hahn said that whilst South Africa cannot be faulted for the amount of time and energy that has been put into the SA IT industry, the results have been disappointing.
“South Africa has dramatically faster growth in computing hardware (24.1% growth), software 13.5% growth and 12% growth in IT services. But telecoms services are falling behind, as there was a 6.7% growth decline,” Hahn said in a live teleconference at Gartner’s annual Symposium ITxpo 2012.
Hahn added that a decline in growth in worldwide hardware sales was due to saturation, but that there was a clear market for it in South Africa – and that the country will see a rapid shift to smartphones in 2013, which will, in turn, cause voice to decline.
“23.8% of SA phones are smartphones and has more than the global average, but that will drop by 2016,” he said.
Despite its struggles, SA remains a massive ICT player across Middle East and Africa.
Some of the challenges that SA must overcome in order to progress with IT include poverty and unemployment persistence; inflation; currency worries; political wind-change; ties to Eurozone and focus on infrastructure. “SA has 10% of MEA revenue in telecom services,” Hahn revealed. “But you can’t just pour money into the problem.”
According to Hahn, on a global scale, communications regulation still lags behind, and has done so for years. Regulators need to get it done as soon as possible to create a level playing field – which will, in turn, attract investors. “We also have to look at Venture Capitalists and start-ups to grease the wheels a bit”.
But it is not all a doomsday scenario. Hahn explained that South African IT opportunities are located on the edge (with tablets and smartphones) and need to be loaded with local content at launch, targeted to limited projects and verticals. “And must be either miserly on network resources, or be able to reinforce network resources,” he explained.
If South Africa fails to act quickly to resolve the problems in the IT industry, it could all go ‘pear-shaped’ very quickly.
“In terms of yearly growth, SA simply isn’t there. SA has a long way to go, but shouldn’t feel disappointed in where they are. Global investment in South Africa in a post-recession world has been favourable.”
Hahn added that the South African IT market still shows emerging traits, has to deal with government and regulatory obstacles and a deteriorating power grid. “Regulations are crucial in setting expectations for all players on the field. South Africa is still very much off the growth path of the BRICS nations.”
Hahn said that companies wishing to invest in the South Africa IT industry must decide now if they are in or out as there are plenty of companies in SA and the window of opportunity is closing quickly.
In closing, Hahn highlighted a number of factors that South Africa could focus on, which will make the IT industry an exciting world.
He said that SA should not wait for another golden plum to fall in their laps, like the SKA project, and said the following areas are key for growth:
– Competition in the Banking App world
– The Wise tablet – which was built and designed in South Africa, for the African market
– Health care – antismoking apps will become more prevalent with new legislation
– Companies need to seek advice, as well as funding from global partners
– Government needs to get IT together
Charlie Fripp – Consumer Tech editor
