Internet future in SA

Industry experts discuss their personal views on the future of the Internet in South Africa

The Gordon Institute of Business Science hosted a discussion on the future of the Internet in South Africa. Specialists from a range of ICT related fields shared their views on the topic.

Mobile Internet

Brian Seligmann, Senior Manager: Data Bearers, Reseller & Roaming Solutions at MTN spoke about the current generation of mobile users, who are starting to expect “always-on connectivity, with predictable pricing. They want any device, anywhere, on any platform.”

“In South Africa we have very low household Internet penetration rates. New technologies and new players mean mobility may be the answer, but costs are holding it back,” said Seligmann.

“This year the virtual and legal monopoly on bandwidth was ended. We will start to see the bandwidth that we need. In a few years time we might find we have more bandwidth than we know what to do with. The point of inflection where we join the 21st century has just started.”

In his vision of the future, Seligmann sees the digitally connected home becoming a reality, the end of single-play TV, and an explosion of mobile video. “Mobile broadband video is the fastest growing application in the world. It is expected that 90% of all IP traffic on the internet will be video by 2013. 64% of all mobile traffic will be video by the same year.”

Mobile banking

Christo Vrey, Managing Executive with Absa Digital Channels, envisioned the future of online banking revolving around “personal financial management and budget tools that will enhance the financial world for the end user.”

However, Vrey noted that significant processing challenges, both internally for the banks, and externally in terms of bandwidth capability, are hindering progress in the area. “Banks are keenly awaiting the opening up of the broadband world in terms of capacity and cost,” said Vrey.

“We would like to take mobile banking further. Some of the mature markets have sophisticated video support services in place. We are looking at what we can do along those lines,” Vrey continued.

On the cloud

Fred Baumhardt, Specialist Sales Director and Chief Technology Officer with Microsoft SA shared his opinions on the current trend of cloud computing, discussing how Microsoft is not asking the question of what cloud computing can bring to South Africa, but how such systems might be feasible.

For example, Baumhardt said Microsoft “won’t roll out a data centre here, because we don’t have a guarantee of constant power.”

On predictions of the future Internet in SA, Baumhardt said “The internet has become the ‘how.’ It is no longer the ‘what.’” He then outlined a vision of devices which take advantage of an interconnected world, delivering a feature rich experience to the end-user – technology along the line of ‘how’ the Internet is used.

Baumhardt ended off by stating Microsoft’s commitment to encouraging more open standards, and suggesting that the industry is not learning from its past mistakes, taking cloud services down yet another closed path.

Online media

Elan Lohmann, General Manager of AVUSA Media Online shared his perspective on the future of online content. Lohmann pointed out that traditional media companies are coming under pressure due to the ease of publishing content online.

“Everyone is a publisher and consumers are everywhere. Everyone can generate sales, transactions and listings,” said Lohmann, describing how a power shift to companies and advertisers means they no longer need to go through a publisher to reach the consumer. Consumers now have the power to pick the kind of
content they wish to take in.

Lohmann cited MyBroadband, Tech Central and The Daily Maverick as prime South African examples of successful online publications that have thrived by targeting a niche not adequately covered by traditional media.

In the future, Lohmann predicts that there will be very different media companies. Aggregators of content will become more prevalent and small, profitable niche journalism sites will appear. Journalism and its watchdog function for society will become even more important as it comes under threat from the aggregation model.

Lohmann asks who will pay the journalists to do their jobs. “Perhaps Google and other aggregators of the world will begin to finance journalism more, to ensure there is good content available,” Lohmann posited.

“Print publications that speak to high income brackets will have a problem. Traditional advertising is highly overvalued and online media is undervalued. The problem is that the cost of advertising on digital is so low, that the revenue is a fraction of what you get in print publications,” said Lohmann.

“Advertisers in the online market don’t understand the opportunity. To me it’s a travesty people aren’t spending money online,” Lohmann concluded.

The speakers agreed that affordability, and the lack of widespread access to Internet connections in SA is the leading challenge to the South African online market.

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