1. SA cellular market overview
Dobek Pater
Analyst BMI-TechKnowledge
SA cellular market overview

2. Market share by subscriber base Market share by revenue
From today onwards
Cellular market growth
The market today & tomorrow
(EoY - March)
Operator
2002
2006
Market share by subscriber base
Vodacom
59%
54%
MTN
36%
32%
Cell C 5%
14%
Market share by revenue
63%
61%
34% 3%
CAGR:
Vodacom: %
MTN: %
Cell C: %
Total market: 15.5%

3. 3 operators - comparison
Vodacom
MTN
Cell C
market leader
upgraded infrastructure/increased capacity & 1800 spectrum
technology – investment in GPRS, less sophisticated billing platform
continued success will require improved network capacity/quality & innovative “mobile data applications development”
currently have high brand visibility, aggressive marketing campaign
main challenge – limiting churn to Cell C
expected to remain no. 2 player in SA
technology – investment in GPRS, sophisticated billing platform, “Airborne”
continued success will require improved domination of channels
limited brand visibility, generic campaign – “Hello the future”
main challenge – improving visibility and positioning of MTN brand; limiting churn to Cell C
always no. 3 operator in SA market -expansion into Africa?
currently rolling out their network – roam on Vodacom network
new technology – investment in GPRS
success will require innovative products & services, new bundles, aggressive marketing, domination of channels & “credibility”
high brand visibility
main challenge – churning subscribers from Vodacom & MTN

4. Revenue growth Revenue growth by operator
Voice vs. data revenue growth
Total market in 2006: R49bn
(bigger than fixed line market)
CAGR:
Vodacom: 18.5%
MTN: %
Cell C: %
- CAGR:
voice: 16.7%
data: %
Data component of revenue:
now: %
in 2006: 12%

5. Strategies Vodacom MTN Cell C Appeal to wide range of users
shifting focus partially to data
i-mode type business plan for data (share revenue)
Concentrate on high end business & SMME sector
MTN keeps revenue generated on network
Branding strategy
Address young users now with hope of grooming them into high spenders later
banking on voice
Economies of scale
Noticed Africa late, but aggressively moving in
Must overcome elitist image
Moved into Africa early and banking on it
Disadvantaged by late market entry
Must overcome problem with roll out
Not likely to move into Africa

6. GPRS / 3G GPRS 3G slow uptake limited usage
Africa (incl. SA) will be voice-driven for the near to medium-term future
EDGE most likely introduced in SA shortly
Key success factor deliver mass consumption content & multimedia at affordable prices 3G
not likely to take root in Africa
more likely scenario – 5G will be adopted in the future ( years’ time)

7. Thank you !