It's all happening in SA's telecommunications industry. The disposal by incumbent fixed-line communications operator Telkom of its 50% stake in cellphone provider Vodacom to the UK's Vodafone and to shareholders, coupled with the liberalisation of the industry, look set to trigger fundamental changes in the next few years.

Competitors are girding themselves for a dramatic increase in competition in SA as operators build an extensive fibre-optic infrastructure in the metropolitan areas and across the country and as at least three new undersea cable projects finally begin to deliver cheaper bandwidth.

At the same time, the race is on to deliver communications to the rest of the continent.

SA's three big listed telecom groups - MTN, Vodacom and Telkom - are all actively pursuing new opportunities north of SA's borders.

First, though, let's look at the changes sweeping the industry in SA.

Telkom's split from Vodacom - a brave move by the fixed-line operator, which had come to depend on the cellular provider's profits and generous dividends - has forced it to recast itself as a converged communications company and to restructure its business dramatically.

It's not going to be easy for the partially state-owned company. It has been beset by management ructions in recent years and is still seen as inefficient and overstaffed. Group CEO Reuben September has restructured Telkom into three large new divisions, namely SA, International and Data Centre Operations, as he moves to ensure that the company doesn't lose significant market share as competition intensifies.

Analysts say Telkom is making all the right moves but the management team must still prove it has what it takes to pull off the restructuring. They say it's a good sign that September is managing to attract top executives to run the new businesses.

Telkom has several big advantages over its rivals, not least the fact that it still operates by far the largest communications network in SA. It has hundreds of thousands of kilometres of national infrastructure. Unfortunately, a lot of this is based on legacy technology, so it has to spend billions of rand every year upgrading to new equipment.

Investment in new telecom infrastructure by Telkom, Neotel, MTN, Vodacom, Cell C, Dimension Data and other new operators, is likely to keep the sector buoyant for years to come. And the new capacity that is being built should improve the prospects for long-term economic growth.

In spite of government attempts to manage the liberalisation of the sector, a high court victory last year by technology group Altech means the market has effectively been thrown open to competition. That means virtually anyone with pockets deep enough can build a national network in competition with the incumbent operators.

Already, Didata division Internet Solutions (IS) - the country's largest, corporate-focused Internet service provider - has committed hundreds of millions of rand to laying high-speed fibre infrastructure for its 220 largest customers and to building other infrastructure.

IS, as well as Vodacom, Neotel, AltX-listed Vox Telecom and others, are cumulatively planning to invest billions of rand in state-of-the-art data centres as firms increasingly look to outsource their information systems and as cheaper bandwidth leads to more South Africans adopting broadband.

In the consumer space, a price war looks inevitable. Intervention by industry regulator Icasa to force down wholesale mobile interconnect rates - the fees the operators charge one another to carry calls on each other's networks - should lead to a reduction in cellular voice tariffs.

And new infrastructure and rising competition in broadband could result in prices coming under severe pressure. Monthly usage limits - the amount users can download - should also increase, leading South Africans to use the Internet far more than they do now. MTN and Vodacom are both investing billions in their networks to ensure they can cope with the exponential growth in demand for broadband.

Telkom, meanwhile, is also building a mobile broadband network, using the same third-generation cellular technology deployed by MTN and Vodacom. Though its network won't be as extensive as that of the two big mobile operators, it plans to sign a roaming agreement with one of them to ensure that its customers can make calls and download data, no matter where they are in the country.

All of this investment and activity is great news for business and retail consumers, who can expect improved services and better prices. The operators themselves though are going to find it hard to retain their historically high profit margins as prices fall. That makes the investment case for potential shareholders in these firms more difficult.

Of course, expansion into Africa could help offset any profit contraction as a result of falling prices in SA. This is the main reason companies such as Telkom and Vodacom are eagerly eyeing opportunities elsewhere on the continent, where telecom infrastructure remains underdeveloped.

MTN has a significant head-start on its rivals. It already operates in nearly two dozen countries across Africa and the Middle East. Its decision to enter the Nigerian market at the beginning of the decade was initially met with scorn by some commentators, but has proved to be an enormous success. Nigeria is now MTN's largest and most profitable subsidiary.

Telecom assets in Africa are relatively expensive and it could prove costly for Telkom and Vodacom to make meaningful acquisitions. They also face intense rivalry from operators in the Middle East.

The Chinese are also eager to establish a foothold on the continent. China Mobile, the world's largest operator, is looking for deals in Africa only. The continent is attractive because teledensity - the penetration of telephones as a percentage of the population - remains so low.

But Africa is also a complex place in which to operate, with regulatory and political challenges. But, as MTN has shown, it is possible to build highly profitable businesses in even the most unstable of political environments.

The stakes are high. But the potential rewards for those who get it right are enormous.