2.2 · Sector Forests
Communication and Digital Economy
The sector overview highlights a core tension within the communications and digital economy, i.e. …
Sector overview
The sector overview highlights a core tension within the communications and digital economy, i.e. strong enabling infrastructure and innovation potential coexist with systemic vulnerabilities that can quickly disrupt connectivity, trust, and inclusion. Against this backdrop, the top 10 risks below reflect the principal external and sector-specific pressures most likely to affect service continuity, affordability, investment and long-term resilience across the digital economy.
p61— see this page in the report
Verdict
Taken together, these risks show that sector resilience is no longer defined only by network performance, but also by the ability to manage trust, affordability, institutional dependency and environmental stress in an increasingly complex operating environment. This naturally leads to a broader examination of the sector’s internal strengths and weaknesses, as well as the external forces that are shaping its future trajectory.
Sector at a glance
- GDP
- Roughly 10–15% including digital services.
- Revenue
- ICT sector around R230 billion annually.
- Connectivity
- About 75% internet users, mostly mobile.
- Infrastructure
- High mobile penetration, expanding 4G/5G and fibre.
- Ecosystem
- Fast‑growing e‑commerce, fintech and cloud services.
Priorities & outlook
Key priorities
- Strengthen cyber resilience, infrastructure reliability and digital inclusion while improving policy certainty and adaptive capacity across the digital ecosystem.
Economic outlook
The CDE sector has strong strategic growth and enabling potential, but near- to medium-term performance will depend on sustaining trusted connectivity amid cyber, infrastructure, policy and affordability pressures.
IRMSA Top 10 impact
How the ten national risks land in this sector — AVE RANK 1 is the highest impact. Browse with the arrow keys; open a risk for its national profile.
Rank 1 · Cyber risk and digital disruption
Systemic cyber vulnerability
Cyberattacks, fraud and data breaches threaten network availability, regulatory compliance, customer trust and financial performance, making cyber resilience central to sector stability.
View as data table
| Rank | Risk | Impact label | Impact narrative |
|---|---|---|---|
| 1 | Cyber risk and digital disruption | Systemic cyber vulnerability | Cyberattacks, fraud and data breaches threaten network availability, regulatory compliance, customer trust and financial performance, making cyber resilience central to sector stability. |
| 2 | Economic crisis, macroeconomic weakness and a non-competitive economy | Demand and investment squeeze | Weak growth and high costs suppress consumer and business demand, compress margins and slow investment in network modernisation and digital innovation. |
| 3 | Electricity, energy and national grid failure | Service continuity and cost pressure | Unreliable and costly energy causes outages, raises operating costs and constrains expansion, especially in under‑served areas, forcing greater spend on backup and alternative supply. |
| 4 | Critical infrastructure and capacitated infrastructure failure | Rollout and resilience burden shift | Failing public infrastructure delays rollout, extends restoration times and shifts the cost of continuity and redundancy from the state to operators. |
| 5 | Governance and leadership failure, state incapacity and institutional breakdown | Policy and regulatory uncertainty | Weak institutional capacity and inconsistent execution create uncertainty around regulation, spectrum, licences and infrastructure development, delaying implementation and raising operating risk. |
| 6 | Systemic corruption, fraud, unethical conduct and organised crime eroding the rule of law, safety and security | Security losses and trust erosion | Corruption, crime and vandalism drive equipment theft, network disruptions and higher security costs, undermining resilience, value for money and stakeholder confidence. |
| 7 | Political instability and constrained cohesive politics | Volatile operating environment | Political volatility, unrest and weak policy cohesion delay investment and infrastructure programmes and increase continuity and security risks. |
| 8 | Unemployment, income disparity, inequality and lack of social cohesion | Affordability constraints and inclusion pressure | High unemployment and inequality reduce affordability and demand for digital services while increasing pressure to balance commercial sustainability with inclusion and continuity. |
| 9 | Climate change and climate resilience failure | Climate‑driven infrastructure stress | More frequent extreme weather events damage towers, fibre and data centres and raise cooling, backup‑power and adaptation requirements. |
| 10 | Water scarcity and water crises | Water‑linked operational constraints | Water scarcity affects cooling, construction and site maintenance and increases the need for water‑efficient design and contingency planning. |
Risks, controls & opportunities
The chapter's ten sector-specific risks with their typical control and the opportunity each unlocks.
Ranked risks
| Rank | Risk |
|---|---|
| 1 | Persistent cybersecurity threats target networks and data. |
| 2 | Energy unreliability disrupts data centres and networks. |
| 3 | Infrastructure gaps widen digital divide between communities. |
| 4 | Digital skills shortages limit innovation and resilience. |
| 5 | Data privacy risks threaten long term regulatory compliance. |
| 6 | Outages and breaches create serious reputational damage. |
| 7 | Fragmented policy creates uncertainty for digital sectors. |
| 8 | Rising cyber expectations strain infrastructure and organisations. |
| 9 | High data costs limit everyday digital adoption. |
| 10 | Digital exclusion restricts vulnerable groups’ opportunities. |
Detail
Select a risk in the table to see its typical control and the opportunity it unlocks.
View full table (controls & opportunities)
| Rank | Risk | Control | Opportunity |
|---|---|---|---|
| 1 | Persistent cybersecurity threats target networks and data. | POPIA compliance and technical controls reduce breaches. | Build regional cyber hub offering managed security services. |
| 2 | Energy unreliability disrupts data centres and networks. | Generators and backup systems partly stabilise digital services. | Deploy renewables and storage supporting resilient edge centres. |
| 3 | Infrastructure gaps widen digital divide between communities. | Universal access policies and broadband projects expand connectivity. | Extend rural broadband and enable inclusive digital platforms. |
| 4 | Digital skills shortages limit innovation and resilience. | Training programmes and internships develop basic digital capability. | Scale artificial intelligence literacy through innovation partnerships. |
| 5 | Data privacy risks threaten long term regulatory compliance. | POPIA programmes and safeguards strengthen organisational data protection. | Grow local cloud capacity to enhance digital trust. |
| 6 | Outages and breaches create serious reputational damage. | Response plans and monitoring support transparent incident management. | Compete on trust, transparency and customer centred design. |
| 7 | Fragmented policy creates uncertainty for digital sectors. | Strategic plans and regulators provide partial policy coordination. | Streamline regulation to encourage innovation and investment. |
| 8 | Rising cyber expectations strain infrastructure and organisations. | Cyber rules and information sharing support basic sector resilience. | Develop structured resilience frameworks and advanced cyber services. |
| 9 | High data costs limit everyday digital adoption. | Pricing rules and sharing arrangements reduce infrastructure expenses. | Offer subsidies and innovative low cost digital services. |
| 10 | Digital exclusion restricts vulnerable groups’ opportunities. | Inclusion strategies and community centres support basic access. | Design inclusive platforms supporting youth and women enterprises. |
Strategic context
Internal context — SWOT
Strengths
- Relatively advanced ICT and telecoms infrastructure base
- Strong core of functional telecoms operators
- Deepening cloud, platform and data‑centre ecosystem
- Policy recognition of digital transformation as a strategic priority
Weaknesses
- Persistent digital divide and spatial inequality in connectivity
- Infrastructure fragility and crime‑related disruption
- Shortage of critical digital and cybersecurity skills
- Regulatory bottlenecks and market concentration
Opportunities
- Accelerated investment in broadband, 5G and open‑access networks
- Expansion of inclusive digital platforms and services
- Public–private collaboration on cyber, infrastructure and skills resilience
- Leveraging 4IR technologies for resilience (AI, IoT, edge)
Threats
- Escalating cybercrime, fraud and data‑privacy breaches
- Global supply‑chain disruptions and technology concentration
- Broader governance, energy and infrastructure failures
- Regulatory non‑alignment and evolving global digital rules
External context — PESTLE
Political
- Policy coherence, governance and institutional capacity
- Regulatory independence and ‑ digital policy stability
Economic
- Macroeconomic pressures and investment appetite
- Digital competitiveness, innovation and SME inclusion
Social
- Digital divide, inclusion and trust in digital services
- Skills, education and workforce transition
Technological
- Network modernisation, redundancy and innovation
- Cybersecurity, data governance and resilience tooling
Legal
- Data protection, privacy and cybercrime legislation
- Licensing, spectrum and competition frameworks
Environmental
- Physical climate and environmental risks to ICT infrastructure
- Energy transition and green ICT considerations
Communication and Digital Economy
UmphakathiVuka next steps
The analysis above shows that resilience in the Communication and Digital Economy sector must be built through coordinated action that strengthens trust, inclusion, infrastructure reliability and institutional responsiveness. In this context, the UmphakathiVuka lens provides a practical way to translate sector risks and opportunities into shared next steps that are community-oriented, future-focused and implementation-driven.
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UmphakathiVuka digital society compact and inclusive regulation
Establish a shared digital society compact that treats connectivity, trust and continuity of services as public goods, with government, operators, platforms, small and medium enterprises and civil society agreeing on common resilience priorities, while regulation and policy remain agile and inclusive to support innovation and public value.
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Cyber resilience and energy-secure digital backbone
Position cybersecurity as a shared national capability through threat intelligence sharing, joint simulations and skills development, and protect critical digital infrastructure from energy instability by accelerating backup, storage and renewable solutions for towers, exchanges and data centres.
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Closing the digital divide and community-centred platforms
Prioritise digitally excluded groups in connectivity, affordability, devices and skills programmes, and design community-centred digital platforms that improve access to public services, livelihoods and social support through low bandwidth options, multilingual access and strong feedback channels.
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Human-centred digital skills, trusted data and responsible artificial intelligence
Expand digital and cybersecurity skills pipelines that deliberately include women, youth and township or rural enterprises, and strengthen privacy, data protection and responsible artificial intelligence governance so that digital trust becomes a core resilience principle.
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Diversified ecosystem, foresight and accountability
Promote a more diversified and open digital ecosystem through infrastructure sharing and interoperability, use foresight and scenario planning to anticipate future digital shocks, and introduce public resilience and inclusion scorecards to build transparency, accountability and confidence in sector performance.
These priorities indicate that the next phase of sector development should focus on combining resilience-building with inclusion, innovation and public accountability. In this way, UmphakathiVuka can help position the sector not only as a managed risk environment, but also as a driver of broader societal resilience and shared digital progress.
Sector vs national ranking
Each risk's national Top-10 wheel rank against its AVE RANK in this chapter's impact grid, sorted by the biggest shift. Rank 1 (left) is most severe. Select a row to pin it.
View as data table
| Theme | Risk as printed in the grid | National rank | Sector AVE RANK | Shift |
|---|---|---|---|---|
| Cyber | Cyber risk and digital disruption | 8 | 1 | ▲ 7 more acute in sector |
| Energy | Electricity, energy and national grid failure | 10 | 3 | ▲ 7 more acute in sector |
| Crime | Systemic corruption, fraud, unethical conduct and organised crime eroding the rule of law, safety and security | 7 | 6 | ▲ 1 more acute in sector |
| Economic | Economic crisis, macroeconomic weakness and a non-competitive economy | 2 | 2 | same rank as national |
| Infrastructure | Critical infrastructure and capacitated infrastructure failure | 4 | 4 | same rank as national |
| Water | Water scarcity and water crises | 9 | 10 | ▼ 1 less acute in sector |
| Inequality | Unemployment, income disparity, inequality and lack of social cohesion | 5 | 8 | ▼ 3 less acute in sector |
| Climate | Climate change and climate resilience failure | 6 | 9 | ▼ 3 less acute in sector |
| Governance | Governance and leadership failure, state incapacity and institutional breakdown | 1 | 5 | ▼ 4 less acute in sector |
| Political | Political instability and constrained cohesive politics | 3 | 7 | ▼ 4 less acute in sector |
Positions from this chapter's Top 10 impact grid (p61) and the national Top 10 wheel.