Regulations, Fixed Line Decline Drive 9% Fall in South Africa Communications Spending

South Africa’s aggregate spending on communications will fall about nine percent in 2015, according to analysts at Gartner.


“Regulations that imposed decreased rates for interconnection” and accelerating decline of fixed services revenue" are the reasons, said Will Hahn, Gartner principal research analyst.


In 2016, Gartner predicts, communications spending will grow about one percent.


In 2015, spending on data center products, enterprise software, information technology services and the IT category as a whole have fallen. Only spending on devices has grown.


But IT spending in South Africa is forecast to reach $26.6 billion in 2016, an increase of 5.1 percent from 2015, according to Gartner.


In 2016, IT spending in South Africa will return to growth. "Spending on devices will show the highest growth in 2016, up 13 percent from 2015, while spending on communications services will remain the highest overall — reaching $11 billion."


South Africa IT Spending Forecast by Sector (Millions of US Dollars)
2015
Spending
2015
Growth (%)
2016
Spending
2016
Growth (%)
Devices
5,568
6.7
6,294
13.1
Data Centre Systems
635
-3.2
666
4.9
Enterprise Software
1,869
-1.0
2,042
9.3
IT Services
6,311
-5.0
6,544
3.7
Communications Services
10,949
-9.1
11,075
1.2
Overall IT
25,330
-4.3
26,620
5.1
Source: Gartner (September 2015)

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