Economic upswing possible as MTN picks Ericsson to handle South African 5G Revolution

Mobile internet connectivity in South Africa is about to get better thanks to the Swedish mobile operator, Ericsson.

As part of MTN South Africa’s modernisation efforts, a deal with Ericsson will bring 5G products to market in 2020.

News of the partnership between South Africa’s telecommunications network and the Swedish supplier broke on November 14. According to those involved, it will not only introduce new infrastructures but drive digital business across South Africa.

In simple terms, 5G networks make better use of the radio spectrum in order to increase download and upload speeds.

Not only will data be transferred faster across the country’s new 5G networks, the technology will improve reliability, uptime and, most importantly, give rise to new innovations.

Indeed, as smart technology and websites become more advanced, quicker connections have become crucial. By working with Ericsson, MTN hopes to improve access to the latest web services for existing users and internet newbies.

Internet Sector Already Blossoming in South Africa

Looking at Internet World Stats, internet penetration in South Africa is 56.2%. That equates to approximately 32 million users, which is the fourth-highest total in Africa (Nigeria leads with 123 million users).

With 5G, more people will have the chance to get online and that will open up new business opportunities. Already, South Africa has a vibrant online economy, with local wireless internet providers such as TrueWAN seeing a surge in activity over the last decade.

The same is true for start-ups such as SA Photographers and Cape Town’s Paperjet. In fact, such has been the growth of online businesses over the last decade, previously untapped industries have found a place in the market.

Prior to the internet boom, casino gaming wasn’t even a niche activity in South Africa. Today, the leading mobile casino operators are not only reviewed by experts, but provide a range of gaming options and promotions for locals.

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Without the growth of the internet, knowing how and where to play slots or get digital signatures on important documents was impossible. Now, however, those things and much more are possible.

Because of that, eCommerce in South Africa is worth more than $3.3 billion, while digital advertising spend tops $1.3 billion according to Statista.

Those figures are replicated across other online sectors, suggesting that further investment will only boost the economy. That will be seen as a positive by analysts following the World Bank’s decision to downgrade the country’s growth forecast.

Additional Revenue Needed Now More than Ever

Citing ambiguous financial policies and weak investor sentiment, the financial organization believes economic growth for 2019 will be just 0.8%.

Although the rollout of 5G won’t instantly transform South Africa’s fortunes, it should improve the nation’s bank balance.

In an increasingly digital world, speed and access are two of the biggest factors driving business revenue. While the benefits for the services and retail sector are obvious, the benefits of 5G extend much further.

The Internet of Things will only expand but provide more advanced services to consumers. Beyond that, remote working will become more popular thanks to improved connection speeds.

Finally, innovations such as artificial intelligence (AI) will be easier to integrate into mobile products thanks to improved internet connectivity. Overall, the advent of 5G has the power to enhance almost every aspect of South Africa’s business sector.

When that happens, revenue will not only increase but so too will investment. That may not provide an instant solution for the country’s current economic woes; however, in lieu of much-needed political changes, a digital revolution should provide a shot in the arm for the economy.

With that being true, financial analysts will be watching intently as Ericsson’s partnership with MTN starts to bear fruit in 2020.

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