Annual Forum Papers

The Internationalization Of The South African Telecommunications Sector

  • Year: 2001
  • Organisation: School of Economic and Business Sciences, WITS
  • Publication Author(s): Milton Taka

South Africa's telecommunications sector is the largest in Africa by important measures, including number of fixed lines, number of cellular subscribers, technological capability, equipment design, manufacturing capabilities, financial revenues, investment and data service users. There has also been substantial and increasing international participation alongside the linked processes of privatization and liberalization. This is consistent with interpretations of globalisation, which hold that there is a range of gains from wider and deeper internationalization of economic activity. I intend to investigate the extent and nature of internationalization in the South African telecommunications sector, determine its contribution to the growth of the sector as well as the degree to which such resource flows are supported by government policies. This paper will examine the impact that cross border telecommunication investment has on the SA telecommunications sector as well as on the economy as a whole.

After an outline of issues from the globalization and telecommunications literature, three key issues will be examined.

First, the extent of foreign involvement in the South African telecommunication sector will be reviewed, covering the provisions of capital, skills and technology in the supply of fixed-line and mobile telephone services. I will examine the magnitude of foreign investments over the 1990s and the extent to which they have been supportive of national goals.

Second, the changing nature of activities of South African telecommunications firms in foreign markets will be assessed. This will include an overview of the increasing internationalisation of South African firms, the main factors driving these trends, and discussion of the implications for their domestic operations.

Third, I will discuss the effect internationalisation has had on the development of the South African economy.