Deloitte’s 2011 TMT predictions

Drawing on internal and external inputs from conversations with member firm clients, contributions from member firms’ 7000 partners and managers specialising in TMT, discussions with industry analysts and interviews with leading executives from around the world, Deloitte has released its technology, media and telecommunications (TMT) predictions for 2011.

A key trend over the last ten years has been convergence where the TMT experts see that the technology, media and telecommunications sectors are now more interconnected and interdependent than ever before. Consequently, developments in each sector are inextricably linked.

Emergence of tablets and Wi-Fi as real players

It predicts that more than 50% of all computing devices sold globally will not be PCs and that 25% of all tablet computers will be bought by enterprises; that figure is likely to increase in 2012 and beyond.

Whilst PCs will still be the workhorse computing platform, tablets will shortly replace computers for mobile executives. Security of data on the move will then be a serious consideration on the risk management menu. Also, as tablets are small and portable, they are a popular target so there are likely to be a host of security based solutions emerging to protect company and personal data.

Business will soon realise that this item is appearing on their ‘grocery’ list, increasing their IT costs due to the variety of different architectures and operating systems to support.

Wi-Fi outstripping 3G

The volume of data uploaded or downloaded from portable devices via public Wi-Fi networks will grow at a much faster rate (25-50%) than the volume carried over cellular broadband networks. The growth in Wi-Fi only devices sales will outstrip that of 3G devices. The bulk of this growth will be video data, with Wi-Fi likely to become the default network for video applications. This could undermine the data revenue model of mobile and line operators. The answer is to ‘own’ all the channels (landline, mobile, Wi-Fi, and TV) to the customer, which follows the lifestyle of the user versus fulfilling a primary technology function only.

It is also likely that South Africa will follow the trend in the US, where big retailers will begin offering free in-store Wi-Fi access to shoppers to enable in-store online comparison shopping. This will increase revenue, keep them in the store longer, guide them in the store, answer their questions and collect data about them. Retailers must understand and stay abreast of regulatory changes and shifting public sensitivities about online tracking practices to strike a balance between maximising revenue and respecting customer privacy.


With access to broadband, it predicts a significant growth in gaming. Consumers will surely have noticed how much more space in toy shops is now occupied by electronic media. The age profile for gaming also varies across the range with the older users having access to disposable income and the younger profile users influencing purchasing spend. There is also a likely decline in gaming hardware sales of almost 20% but an increase of gaming software revenue of 6%.

An increasingly large percentage of games revenue is likely to come from monthly subscriptions, peripherals, fees for services and in-game purchases and advertising in the free-to-play (F2P) and ‘Freemium’ markets.

The games industry appears to be following in the footsteps of the enterprise software market. Two decades ago, 90% of enterprise software revenues were one-time licence sales – equivalent to buying a game disc – and there were virtually no follow-on revenues or service fees. Today, many software companies derive more than half of their revenues from services and subscriptions and licence fees are much less critical.

Although this change was disruptive to the industry, most enterprise software companies found that after the transformation they were still able to grow profitably while enjoying less revenue volatility. The games industry might be able to learn from their experience, leveraging best practices from the enterprise software industry while developing new best practices of its own.

With this increase, technology platforms for games are also likely to proliferate further as the smartphone market share grows in South Africa.

Social network advertising

Its view is that the advertising revenues from social networks are likely to be very significant: total industry revenues of $5 billion and year-on-year growth of 40% are impressive numbers. Yet revenues on a per-subscriber basis are unlikely to match search or traditional media in the next year or two. Also advertising rates are likely to remain low compared to other forms of online advertising as well as traditional media.

Nevertheless, owing to their low cost base, social networks might still achieve impressive gross margins despite their relatively low revenues-per-user, particularly when compared to the traditional media companies against which they are competing. A social network’s cost of content is close to zero since it merely provides the infrastructure, while its users and third party application developers provide all the content.

Source –