South African Internet users grew by 12.5% to 4.5 million in the past year - the fastest growth since 2001 - boosted by broadband offerings, a new report showed.
# Cable to slash Internet, phone costs
The report compiled by World Wide Worx, backed by Cisco Systems, showed that the growth rate could have been faster had it not been for "a highly restrictive" regulatory environment.
"It is only the beginning of a dramatic turnaround, and is occurring despite numerous obstacles in the way of growth," said Author Goldstuck, MD of World Wide Worx.
The Internet Access in SA 2008 report showed that growth has come largely on the back of dramatic take-up of broadband offerings by small businesses, which alone accounted for half of the growth in the market, mainly through connecting office staff to their ADSL links.
At the same time, the market as a whole has seen a continued dramatic shift from dial-up connections to broadband, with growth in both ADSL and 3G at more than 50%, the report showed.
The recent court ruling that about 300 Value Added Network Service providers could build their own networks, and the 2009 mid-year launch of the second transatlantic cable Seacom, boost chances of an even higher growth rate.
"We believe these changes will lead to sufficient levels of competition, increase access to Internet usage and in turn, increase global competitiveness and economic diversity," says Reshaad Ahmed, senior manager of Cisco’s Internet Business Solutions Group.
South Africa could, potentially, go from five major service providers to more than 300 overnight.
Goldstuck described the government decision to withdraw from opposing the court decision allowing all operators to build their own networks as a pivotal moment, but one that should have occurred four years ago.
"But the market has been anticipating this change, and numerous small, semi-legal networks have sprung up around the country in the past year. Many of these should emerge above the radar with their new licences, along with new entrants into the market," he said.
Sign up with Google