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Vodacom leads growth in South African WCDMA market

South African market reaching a crucial tipping point in terms of high- speed mobile services

With market penetration set to surpass the 90% mark within the quarter, South Africa is one of the most mature African markets. However, WCDMA and HSPA in South Africa is still very much in its early stages with the WCDMA (Family) share of total net additions running at just under 20% in first quarter 2008. We expect this to ramp up steadily as handset availability and network capacity grows, but do not forecast the erosion of the installed GSM base until 2010. We forecast that WCDMA (Family) net additions will account for almost 100% of total net additions within a few years.

The difference in pre- and post-pay ARPU illustrates the challenge operators have in signing-up customers to high- speed services in a cash-based economy. In a market with 86% of its base on prepay, convincing customers to switch to contract tariffs is tough. Operators will need to attract customers to data services by promoting them on prepay tariffs, and offering attractive bundles, promotions and discounts.

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