Report: broadband usage to double next year

By   |  November 28, 2005

Broadband Internet access, which finally made an impact on South Africa in 2005 with the first 147 000 users settling into high speed online lives, will almost double in usage in 2006 to 277 000 users, according to South African research firm World Wide Worx\’ Broadband in South Africa 2005 report.

The biggest success story of broadband, according to the report, is Telkom’s much-criticised ADSL service. Aggressive marketing and continual movement in pricing and bundling strategy has seen far more rapid roll-out than Telkom’s critics had forecast. Not surprisingly, Telkom dominates broadband, with ADSL holding 66% of the market — a share that is unlikely to diminish in 2006.

“We found that there is little incentive for Telkom to respond to critics of ADSL, since the customers are voting so strongly with their wallets,” says Arthur Goldstuck, MD World Wide Worx. “Particularly among small, medium and micro enterprises (SMEs), it is a solution that works, at a price that has not scared them off. For consumers it remains expensive, and that it is the source of most of the criticism.”

For now, says Goldstuck, Telkom can continue to rely on continued demand from SMEs, as well as pent-up demand from high-end consumers. Only after it has met this demand will it be forced to address pricing issues, unless the regulator steps in first.

The barriers to consumer entry also mean that broadband will not grow South Africa’s Internet user base dramatically in the short- to medium-term. The report, which forms part of World Wide Worx’s annual study of the Internet access market, shows that if broadband growth rates projected for 2006 continue through to 2008, the broadband market will still only represent around 14% of the Internet user base.

“It’s the kind of growth rate we saw in the early years of Internet take-up in South Africa, but it’s still going to be a big disappointment for some operators,” says Goldstuck. “Those who are investing in broadband roll-out expect instant take-up by the public, and that simply does not happen in what is still a luxury category.”

Telkom’s ADSL, Sentech’s MyWireless, WBS’s iBurst, Vodacom 3G and MTN 3G are likely to be joined by another two players in 2006, while the Second Network Operator may well launch wholesale services that open the way for more niche operators.

“The good news is that we are seeing real choice beginning to emerge, not just among the five broadband providers, but also within the product range of each of the operators,” says Goldstuck.

“The premium offerings may be expensive, but for the ordinary user with average Internet needs, there is a price point to suit the pockets of most working people who have computers and phones at home.”

The report strikes a sobering note with regard to the digital divide, warning that broadband is not the solution that will bridge the gap between the haves and the have-nots. For that, massive intervention is still required by the Government.

“Technology by itself won’t change the lives of the disadvantaged,” says Goldstuck. “For that you need a commitment from Government, and that commitment must run from top to bottom. In the absence of meaningful policy leadership, access to technology will remain the domain of the privileged.”

Comments

2 Responses to “Report: broadband usage to double next year”

  1. Christiaan Erasmus
    November 29th, 2005 @ 12:00 am

    Telkom is ensuring that South Africa is left behind globally with their monopolistic pricing. SMEs and wealthy individuals are flocking to ADSL, not due to good pricing, bandwidth limits or speed, which is abysmal when compared internationally, but because there is no other option.

    Telkom is protecting their own interests, especially diginet lines, dynamically assigned IP addresses except on the high end packages, and traditional telephone service through port shaping causing a delay on VOIP calls.

    ICASA, which is supposed to be our watchdog, can just as well be dismantled because they did not even try to protect South Africans against the hard-cap policy that Telkom implemented at the beginning of the month, pushing bandwidth costs even higher.

  2. MailMan
    June 29th, 2006 @ 12:00 am

    2 times 0.0 something makes 0.0 something
    broadband is a strong tool and a potential
    lifeline for lots of individuals who are willing to fight for themselves and families
    an uphill battle in order to secure a monthly
    salary covering the basics and hopefully a bit more.Once you succeed to find any sort of job in line with skills and what you studied for and don\’t get sucked into a thoroughly corrupt and run by people who can\’t speak a second sentence without using, abusing,insulting those they verbally claim to cater for.

    38 % unemployment, an ANC in leadership crisis and effectively hindering progress in stat of initiating it,labour unions without
    a clue about economics and common sense.

    The past is the past and yes, the future is the future, the ANC served it\’s purpose under
    remarkable leadership of Mr.Nelson Mandela and others.What has been achieved sofar is quite remarkable, the fact that all sorts of misstakes, blunders, corruption have become
    a \”what else is new\” issue can partially be explained and forgiven,ignoring and failing to act is not a crime in itself but morally
    the same.
    Asgisa talks is about painting a ship assuming it will sail faster or discussing
    how Berlin is best defended and the first step in conquering Moscow and London.

    Germany could only arise out of its ashes
    after WW 2 because of its brainpower, dispcipline, creativity and most important the educational system which helped them with
    financial support (Marshall plan) to rebuild
    the economy.Social responsibility to care for
    eachother and provide the basics for a society based on equal opportunities and cater for the less fortunate is only possible
    when the Gross National Product increases substantially, the State has to provide the circumstances to enable individuals and companies to flourish.
    Cape Times Business Report page 4 \”More Asgisa talks ahead says Mlambo-Ngcuka\”

    The article ends with a comparisation between India,China and South Africa.

    She simply wipes technology and manufacturing
    as providers of sustainable jobs from the table.China is facing challenges of a magnitude which are 100 times bigger as any form or structure is in sight at this stage
    in time to start to build a platform where
    individuals can think of freedom of speech, acces to information, justice, freedom of religion, education,travelling, labour laws,
    decent salaries,freedom to organise etc etc.

    Take a week off, surf the web, see that there
    is an enormous amount of people worldwide willing to assist in all sorts of forms to help, assist,train,educate,stop abusive lanquage versus foreigners willing to invest
    and chase them away.
    There is not a product nor service which can not be produced or given in South Africa.
    Stick your nose into the pipeline of R and D and you will be astonished,with the pace of technology acces of BROADBAND based services
    from simple to highly sophisticated costs a fraction of what people tend to think,all sorts of costs savings,information, education,mother lanquage, generate income, jobs,security and a 1000 things more.

    Education at this stage is producing skills which are no longer needed on this planet
    and needs dramatical changes, no one is born ignorant,education starts the day children are born.Broadband can provide and stimulate
    curiosity and help to avoid that children of
    the less fortunate have lost the battle for a decent life before it even has started for them.Broadband is indeed no miracle medicin but a tool to empower,nothing at this stage in time can come even close to the opportunities it can generate.Missing the boot will have disasterous consequences and this time there is no one else to blame.

    MailMan

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