Policy Paper 57
South Africa’s persistent growth and employment underperformance have drawn renewed attention to structural reform in network industries. Over the past decade, GDP per capita growth has remained well below population growth, while unemployment has stayed above 32 percent. Digital transformation has recently been added to the priority reform areas under Operation Vulindlela Phase II, creating an opportunity for reassessing the role of digital infrastructure in inclusive growth. Drawing on an extensive empirical literature, much of it focused on sub-Saharan Africa, this paper examines South Africa’s digital infrastructure landscape: a progressively deconcentrating mobile market with near-universal 3G and extensive 4G coverage; a fixed broadband sector reshaped by the conditional approval of the Vodacom–Maziv transaction; and persistent gaps in affordability, adoption, and effective use. The central argument is that South Africa’s digital infrastructure challenge is no longer primarily one of basic network coverage. The binding constraints now lie in affordability, effective adoption, regulatory modernisation, energy reliability, and the institutional capacity to implement complex reforms.
Keywords: Digital infrastructure, broadband, mobile telecommunications, inclusive growth, competition policy, telecommunications regulation, spectrum policy, fixed broadband
