Sunday, November 12, 2006

Broadband usage in South Africa - 2006 - not yet a turning point

Oct 3, 2006 Myadsl wrote about South African broadband users number over 300 000. This follows Balancing Act’s report on North Africa Internet Country Market Profiles published early 2006 already noted “Morocco has over 300,000 DSL broadband subscribers (reaching 325,000 lines at the end of June), making it the largest broadband market on the continent . Not surprisingly, Morocco currently has the cheapest DSL connection on the continent, starting at US$17 per month for a 128/64k uncapped broadband connection.” And Balancing Acts followup on Maroc Telecom shows how their revenues are forging ahead with almost 12% growth.

The ITU puts South Africa at 7th place in Africa for Internet density, after Seychelles, Mauritius, La Reunion, Gabon and Sao Tome and Principe. The latter being most interesting because of it's poor economy. Are all the islands here because tourism locations put pressure on the industry, or is it because these have the lowest base (populations), or is it that in the case of Sao Tome and Principe, that the .st domain name has been leveraged to bring great opportunities to those that cannot ordinarily access in the Internet in Africa?

The South African Broadband study we did last year (posted in June) predicts potential for more than 600,000 to 1m broadband users by 2010, but more importantly expresses the benefits to the economy of lower prices. Seems like the the price for broadband is decreasing at a rate greater than expected, but can it be sustained? Digital Pilgram writes about "A 60% drop in price". A 512kbps ADSL service was setting you back from R800 to around R320 today. "Use a dial-up for 30 minutes a day (at less than 56kbps) and you've justified a move to a 512kbps ADSL service."

Seems to be some innovation from the ISP industry plus the demand on Telkom to grow and roll out more adsl, which has brought dome some of the costs. The next issue we need to resolve - as the Pilgrim agrees - is the costs of expensive international bandwidth and access to SAT3. Pilgrim worries if we're bandwidth junkies or I ask, is this all what information society is about? Can Neotel help?

Myadsl writes just 3 weeks after the post about 300,000, how Broadband prices need to be drastically reduced to make it more attractive to a wide portion of the local population". They argue that our local broadband penetration rate of just over 0.7% is completely insufficient to be economically competitive. "The OECD Broadband Penetration rate is currently 15.5%, over 2200% higher than South Africa’s figure". We're not just far behind the rest of the world, we're falling further behind at a rapid rate. This will take more than Neotel, good adsl regulations, good wireless spectrum licensing, good SAT3/international. There are indications of this as Duncan McLeod, indicates in the Financial Mail, 3 November he lists 'the cracks opening up' as: Neotel, iBurst, Vodacom and MTN, Municipalities and ISPs.

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2 Comments:

Anonymous Tyler said...

300 000? wow, thought it was a lot less! Im sure its still under 10% of total internet users in South Africa. You wouldn't happen to have any info on how many internet users S.A. has?

6:00 pm  
Blogger aLan said...

There are different views on this and various methods of counting. For example, lots of people have email and work and may or may not have web access. How do you count them?

According to the ITU and other figures it's more than 3m. So yes, it's still less than 10%.

10:21 am  

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