South Africa has made much progress toward competitive telecommunications over the past decade, with plummeting prices in real terms and near-universal access to telephones and the internet.
However, compared with peer economies, we remain unusually dependent on mobile rather than broadband internet access. That holds down costs in the short run but poses long-term risks by limiting capabilities, especially for small businesses and working-class households.
Lower prices have been a critical area of success over the past 10 years. The cost of a modest mobile package and a gigabyte of data is now on par with that in other upper- and middle-income economies, excluding China, which is in a class of its own due to its size and technological depth. From 2016 the price of telecom services in South Africa dropped 50% in real terms, deflated by the consumer price index (CPI).
Despite falling prices, extreme income inequalities mean telecommunications remain expensive for the majority. In 2022 cellphones and the internet accounted for about 3% of expenditure by households at every income level. For the richest 10% that translated to more than R1,000 a month, which permitted access to fixed broadband as well as better phones. The poorest 60% of households spent less than a quarter as much on telecommunications and almost none could afford broadband.
Yet, virtually every South African family now has at least one mobile phone and many have multiple smartphones. In 2024, 95% of households had a phone of some kind, up from 55% in 2004. Four out of five used their mobile devices to access the internet, compared with a quarter in 2009.
South Africa far outstrips peer economies in this regard. In other upper- and middle-income countries on average there were 1.25 cellphone subscriptions per person in 2024; in South Africa the figure was 1.8. Over the past 20 years it has risen steadily from 0.43 subscriptions per person.
The picture for fixed broadband is not so happy. In 2024 South Africa had just one subscription for every 200 people. That was a significant increase compared with a decade ago and subscriptions more than doubled in the past two years alone. But in peer economies outside China there were 32 subscriptions for every 200 people, or 16 times as many as in South Africa. In China, there were 90.
Broadband access was particularly skewed by income inequalities. In the poorest 60% of households only about 5% had broadband at home in 2024, compared with 75% of households in the richest decile. The Gauteng metros plus Cape Town held a third of all households but two-thirds of those with broadband access.
South Africans use mobile phones, which are cheap and convenient, whereas other countries use broadband. But mobile access doesn’t work well for a host of economic transactions, such as managing accounts, engaging with customers on scale and chasing information. My phone may be good for Instagram, but I wouldn’t want to use it to analyse a spreadsheet.
Inequitable access to broadband follows from the way it is provided. Other basic infrastructure ― roads, water and electricity in particular ― is a collective responsibility through the state. Broadband is provided almost exclusively by private companies. That ensures first-class service for households that can pay the cost but limits access for the majority.
The government has tried to ensure greater equality by setting conditions for licences and providing broadband at public institutions such as schools and clinics. In practice though, it finds it difficult to enforce conditions attached to licences and mergers. Moreover, for businesses, using only off-site broadband is problematic.
Ultimately, as with so many South African dilemmas, the question is how much redistribution is viable, whether through conditions on private suppliers or through taxation. To come up with more sustainable and desirable answers we need a broader discussion of the options and far more consistent reporting on the location of new cable investments and connections.
• Makgetla is a senior researcher with Trade & Industrial Policy Strategies.
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