South Africa ICT Market Size was valued at USD 34.2 Billion in 2022. The ICT market industry is projected to grow from USD 37.2 Billion in 2023 to USD 73.0 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 8.80% during the forecast period (2024 - 2032). Advancements in technology, increased internet penetration, government initiatives, and rising demand for digital solutions are the main market drivers anticipated to propel the ICT market in South Africa.
Figure 1: South Africa ICT Market Size, 2022-2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The ICT and electronics industry in South Africa is well-developed and sophisticated, making a significant contribution to the country's GDP, driving the market CAGR. Major global players such as IBM, Unisys, Microsoft, Intel, SAP, Dell, Novell, and Compaq have established subsidiaries in South Africa, leveraging it as a regional center and supply base for neighboring nations. With the entry of more internet providers and improved bandwidth availability, security, and broadband pricing, cloud computing is gaining prominence. As of early 2023, South Africa had 43.48 million internet users, representing a penetration rate of 72%. Social media users accounted for 25.80 million people, approximately 42.9% of the total population of 60 million. The number of internet users in the country increased by 357,000 (0.8%) compared to the same period in 2022. Additionally, there were 112.7 million active cellular mobile connections in South Africa, equivalent to 187.4% of the total population.
Online sales in South Africa surged by 66% from 2019 to 2020, reaching over $1.8 billion (ZAR30 billion). The top e-commerce product category in South Africa, after data and airtime, is clothing and apparel, followed by online entertainment. The e-commerce industry in South Africa is primarily divided into two sectors: fashion and toys, hobbies, and DIY. Fashion accounted for 32% of the total market value in 2022, followed by toys, hobbies, and DIY at 27%. Electronics and media, furniture and appliances, as well as food and personal care, represented 18%, 15%, and 8%, respectively. The growth of online retail and e-commerce platforms is fueling demand for ICT solutions in areas such as online payments, digital marketing, logistics, and customer relationship management. Therefore, the market is expanding due to rising mobile and internet penetration, especially in rural areas, and Increasing adoption of e-commerce and online business models. Thus driving the ICT market revenue.
The South Africa ICT market segmentation, based on Type, includes Hardware, Software, IT Services, and Telecommunication Services. The Telecommunication Services segment dominated the market mostly. The South African telecom market is poised for growth, driven by the expansion of LTE/LTE-A and 5G connectivity. The government's decision to phase out 2G and 3G networks over the next three years further underscores this trend. After significant delays, the long-awaited spectrum auction finally took place in March of this year, with the regulator ICASA generating over ZAR14.4 billion (USD 970.0 million) in revenue from the sales. In March 2023, South African authorities concluded an auction of spectrum in the 700MHz, 800MHz, 2.6GHz, and 3.5GHz frequency bands for 5G services, with active participation from all operators. As per the auction's rules, operators are required to achieve population coverage ranging from 80% to 97% within five years. These newly acquired spectrums enable operators in South Africa to enhance the capacity, speed, and coverage area of their 5G networks.
The South Africa ICT market segmentation, based on the Size of Enterprise, includes Small and Medium Enterprise and Large Enterprise. The Small and Medium Enterprise generated the most income. The IT and startup industries are experiencing significant growth in South Africa. The ICT Small, Medium, and Micro-Enterprises (SMME) Development Strategy, introduced by the South African government, aims to accelerate the growth and advancement of the SMME sector. Government funding is allocated towards initiatives such as incubation, networking, and capacity-building collaborations to support this endeavor.
Figure 2: South Africa ICT Market, by Size of Enterprise, 2023 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The South Africa ICT market segmentation, based on Industry Vertical, includes BFSI, IT & Telecom, Government, Retail and E-commerce, Manufacturing, Energy and Utilities, and Other Industry Vertical. Retail and E-commerce generated the most income. In 2022, retail food sales in South Africa reached $38 billion, while imports of consumer-oriented agricultural products amounted to $3.2 billion, up from $3.1 billion in 2021. Retail trade sales account for nearly 20% of South Africa's GDP. According to the "Online Retail in South Africa, 2022" study conducted by World Wide Worx with Mastercard, online retail in South Africa experienced a 35% growth in 2022, totaling R55 billion. This follows a 40% growth the previous year, bringing the total to R42.3 billion in 2021. Increased online retail activity necessitates robust e-commerce platforms, requiring investments in website development, hosting, and online payment systems, driving demand for ICT services and solutions.
Businesses and government institutions across South Africa are increasingly investing in digital transformation initiatives to enhance efficiency, productivity, and customer service. This includes the adoption of technologies such as cloud computing, big data analytics, and the Internet of Things (IoT). According to the GSMA, the number of cellular IoT connections in the region is projected to reach 53 million by the end of 2030. Vodacom South Africa has reported coverage for 80% of the population, slightly less than their 4G population coverage. The IoT Industry Council of South Africa (IOTIC) has noted a significant surge in IoT adoption trends, particularly in sectors such as commercial office space, mining, agriculture, and manufacturing. For example, in August 2022, Sigfox South Africa introduced an LPWAN IoT solution aimed at reducing the cost and complexity of massive IoT adoption across various sectors, including energy, manufacturing, agriculture, healthcare, and logistics.
Leading market players are investing heavily in research and development to expand their product lines, which will help the ICT market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the ICT industry must offer cost-effective items.
Major players in the ICT market are attempting to increase market demand by investing in research and development operations including IBM Corporation, Unisys, Microsoft, Intel, Dell Inc., Novell, SAP SE, Wipro, Vodacom South Africa, Telkom SA SOC Limited, MTN South Africa, Cell C Limited, Saicom South Africa, ATC South Africa.
December 2022: Telkom launched its 5G Wireless Broadband service, including 5G Internet Data tariffs, in select coverage areas. This latest high-speed wireless internet technology offers consumers faster download and upload speeds, enhancing their experience with activities such as gaming, music streaming, video streaming, and app downloads.
November 2022: Vodacom introduced an advanced patient engagement solution that integrates a computer-aided emergency services dispatch system, marking a first for South Africa's public healthcare sector. This initiative, held at the Provincial Health Offices in the Northern Cape, showcases the potential of public-private partnerships to drive innovation and improve healthcare outcomes, potentially saving lives.
| Report Attribute/Metric | Details |
| Market Size 2022 | USD 34.2 Billion |
| Market Size 2023 | USD 37.2 Billion |
| Market Size 2032 | USD 73.0 Billion |
| Compound Annual Growth Rate (CAGR) | 8.80% (2024-2032) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019- 2022 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Type, Size of Enterprise, Industry Vertical, and Region |
| Countries Covered | South Africa |
| Key Companies Profiled | IBM Corporation, Unisys, Microsoft, Intel, Dell Inc., Novell, SAP SE, Wipro, Vodacom South Africa, Telkom SA SOC Limited, MTN South Africa, Cell C Limited, Saicom South Africa and ATC South Africa |
| Key Market Opportunities | ·Leveraging the potential of 5G technology for enhanced connectivity..Investing in cybersecurity solutions to meet the growing demand. |
| Key Market Dynamics | ·Increasing adoption of e-commerce and online business models..The growing popularity of smart devices and wearables. |
Frequently Asked Questions (FAQ) :
The South Africa ICT market size was valued at USD 37.2 Billion in 2023.
The market is projected to grow at a CAGR of 8.80% during the forecast period, 2024-2032.
The key players in the market are IBM Corporation, Unisys, Microsoft, Intel, Dell Inc., Novell, SAP SE, Wipro, Vodacom South Africa, Telkom SA SOC Limited, MTN South Africa, Cell C Limited, Saicom South Africa, ATC South Africa.
Telecommunication Services dominated the market in 2023.
Retail and E-commerce had the largest share in the market.
Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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