Broadband prices should drop drastically
A recent panel discussion at the Internetix conference at The Campus in Johannesburg tried to establish the efficiency of the regulatory environment in the South African telecoms market.
During the panel discussion Vodacom CEO, Alan Knott-Craig, highlighted the need for lower broadband prices. Knott-Craig said that broadband prices need drop by between 60% and 90% to realise the benefits of larger penetration rates of Internet connections in South Africa.
Knott-Craig said that one of the biggest problems in the local telecoms market was the shortage of transmission network capacity. This, he said, was a result of regulation and politics which gave Telkom a de-facto fixed-line monopoly.
Knott-Craig said that it was no surprise that many telecoms operators were investing in their own fibre networks to try and alleviate the critical shortage of backhaul network capacity. He said that the current situation of bandwidth demand outstripping supply would have to change first before real price reductions would be seen.
Knott-Craig also said that South Africa could not afford a situation where Telkom was the only backhaul network provider as was the case a year ago. For proper broadband at affordable rates South Africa needed much more backhaul network capacity to serve the potentially very large broadband subscriber base.
Telkom’s Thami Msimango admitted that Telkom alone could not keep up with the bandwidth demands of a fast-growing South Africa, and that Telkom welcomed competition to assist in meeting the telecoms needs of the country.
Redistribute unused spectrum
Knott-Craig highlighted the need to redistribute unused spectrum – typically in the hands of Sentech and Telkom – to players who would make use of this spectrum to deliver services to consumers.
This valuable resource could make a big difference to enable players such as Vodacom to roll out more affordable broadband services to consumers, Knott-Craig said.
Big broadband growth expected
During the same conference Google South Africa country manager, Stafford Masie, said that Google was very bullish on both future bandwidth pricing and broadband uptake in South Africa.
Masie said that he expected South Africa to go from one of the countries with the highest bandwidth and broadband pricing to one of the lowest in the next few years.
The Google SA manager further said that he expected there to be between 10 and 12 million broadband users in South Africa by 2010/2011.
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