South Africa’s broadband growth lacking
|October 26, 2006|
The recently released OECD Broadband Statistics indicates that local broadband growth is nowhere near where it should be.
South Africa currently has around 350 000 broadband subscribers which translates into a local broadband penetration rate of just over 0.7%. The OECD Broadband Penetration rate is currently 15.5%, over 2200% higher than South Africa’s figure.
While the tremendous differentiation is of great concern in itself, an even more pressing issue is the slow growth rate in South Africa.
Over the last six months the average growth rate among OECD countries was 1.9%, many times higher than South Africa’s growth rate over the same period.
When we extend the growth rate period to four years, the OECD countries showed a growth rate of 10.6%, 15 times higher than South Africa’s 0.7%.
This means that South Africa is not only very far behind the rest of the world regarding broadband penetration and usage, but is falling further behind at a rapid rate.
To reverse this trend will not be easy, but at least the first step towards improving these abysmal figures is clear.
Broadband prices need to be drastically reduced to make it more attractive to a wide portion of the local population.
Unless broadband becomes affordable to the majority of South Africans, it is unlikely that we will see the accelerated uptake needed to make South Africa competitive in the worldwide Internet and IT arena.
ADSL driving Broadband
It is interesting to note that fixed line technologies like DSL are continuing to drive broadband uptake internationally.
In the OECD countries, DSL accounts for 63% of all broadband connections, with cable modems making up 29% and other technologies like satellite, fibre and fixed wireless connections only accounting for 8%.
One should however not make the mistake of thinking that this 8% is mostly wireless connections.
Fiber-to-home connections, which typically give speeds of 100 Mbps upwards, are gaining in popularity in countries like Japan and Korea.
The total number of ADSL subscriptions in Korea and Japan has in fact continued to decline as more users upgrade to fibre-based connections.
In South Africa close to half of all broadband connections are wireless, and this is a result of high ADSL prices and poor availability and installation times for DSL.
Unfortunately ICASA’s recently released ADSL regulations failed to adequately address the problems that persist in our fixed line broadband environment, and with Government’s continual interference in the telecoms arena it may not change anytime soon.