Universal Journal of Management 5(6): 278-290, 2017 http://www.hrpub.org DOI: 10.13189/ujm.2017.050603 Achieving a Sustained Competitive Advantage in the South African Telecommunications Sector Mfanasibili Ngwenya Graduate School of Technology Management, Faculty of Engineering, the Built Environment and Information Technology, University of Pretoria, South Africa Copyright©2017 by authors, all rights reserved. Authors agree that this article remains permanently open access under the terms of the Creative Commons Attribution License 4.0 International License Abstract The sustainability of South African telecommunications companies is under threat. Such threats are as a result new regulations that allowed influx of new entrant in the form of ISPs (Internet Service Providers) and the emergent of over-the-top (OTT) applications in recent years. This research seeks to understand the factors that influence a sustained competitive advantage despite all the challenges in the telecommunications industry in South Africa. The research explained the relationship that exist between service quality and sustained competitive advantage as well as the relationship that exist between intellectual capital and sustained competitive advantage. The study looked at the influence from both an internal perspective and external perspective. The internal perspective analysed the three constructs that make up intellectual capital namely; human capital, structural capital and relational capital. The external perspective used the SERVQUAL model to analyse how customers perceive services they expect to get from the telco providers and how they perceive the services after an encounter with the telco provider. The SERVQUAL model looks at five constructs of service quality namely; tangibility, reliability, responsiveness, assurance and empathy. The results of the study show that in the telco industry, relational capital is the most important dimension of intellectual capital followed by human capital, with structural capital coming up last. On the service quality variable, the research shows that customers see assurance as the most important dimension of service quality. With this in mind, the telco companies need to focus on their relational capital and human capital which includes customers and suppliers. They also need to focus on the assurance and responsiveness part of service quality. These variables will then influence future behaviour of customers (external view) as well allow employees to forge relationships that are long lasting and develop skills continuously (internal view). These dimensions are critical for the telco providers to achieve a sustained competitive advantage. Keywords Service Quality, SERVQUAL, Competitive Advantage, Intellectual Capital, Relational Capital, Structural Capital, Human Capital, Tangibility, Assurance, Responsiveness, Reliability, Empathy 1. Introduction The sustainability of most companies remains under threat unless conscious steps are taken by management to remain relevant. This is especially true in the telecommunications industry where information moves at the speed of light from one part of the world to any destination, and technological changes happen at the blink of an eye. The over-the-top (OTT) applications have increased tremendously in recent years with the introduction of smart phones and tablets. An OTT application is any application or service that provides a product over the Internet and bypasses traditional ways. Services that come over-the-top are most typically related to media and communication and are more often than not lower in cost than the traditional methods of delivery. The South African telecommunications sector is not immune to these challenges. Other challenges are caused by changes in regulations, entry of new players, and more disruptive innovations. This kind of competition comes with disruptive innovations in a sense that such innovations threaten traditional revenue streams of telco companies. This research attempts to answer the effect of intellectual capital and service quality to sustained competitive advantage despite the challenges mentioned above. The dimensions that make up intellectual capital are examined and the most influential dimension is determined. On the other hand, the five dimensions that contribute to service quality (SQ) are discussed and the most significant applicable in the telecommunications industry in South Africa from a customer perspective is tested. The study assumes that a combination of superior intellectual capital (IC) of a company and great service should lead to sustainable competitive advantage. However, the study also takes cognizance that each of the constructs that contribute to