Where can we go with broadband?
This contradicts the conventional wisdom that broadband connections are only for the elite and require massive investment in infrastructure.
It is important to bear in mind that there were similar arguments about the deployment of GSM technology in the early 1990s. The eventual reality was far removed from the original predictions and the drivers for broadband adoption are very similar: convenience and the need for communications (both personal and business).
The prospects for GSM were thought to be about half a million users within five years. After a couple of years, there were already over five million.
Where there is a demand, service providers will structure their offerings to take advantage of it. We have already seen a significant reduction in broadband charges. There is already competition for the incumbent operator in the form of attractively priced mobile and wireless broadband packages. With Neotel soon entering the market, things will only get better for the end-user.
We have to get away from the idea that technology is a “nice to have” – it is now an essential ingredient for doing business in a world where markets are truly global. Even for individuals, lack of access to connectivity puts constraints on communication, lifestyle and potential. In fact, it is often more expensive to communicate in the old-fashioned way than to use mobile telephony or broadband. The same is true for businesses, but the consequences – costs and lack of competitive edge – are magnified in their impact.
There is the argument that infrastructure is capital-intensive but, as with GSM, where the demand is strong the investments will inevitably be justified.
Communication is an essential need for all human beings – and businesses. The same need drives the adoption of any technology that facilitates this, whether it is mobile telephony or broadband access.
Compared to former access technologies – dial-up or basic ISDN – broadband connections have the ability to handle high data volumes and deliver a rich content experience for the user. For businesses, it means that transactions can be handled faster and in greater numbers. The advantages are compelling.
There has been commentary on the topic of the relatively slow uptake of broadband ADSL in this country, as compared to the experience in Europe, for example. ADSL subscription in SA has crossed 175 000 lines, but still represents an extremely small market penetration at less than 0,4%.
Balancing Act, a weekly e-letter, recently noted that three years ago African telco executives were queried about the timing for the roll-out of broadband in any form. The universal response was that the market was too small and the implementation too costly. The e-letter now says that three years down the line it is easier to list the telcos not rolling out broadband than those who are.
However, speaking from inside the industry, I would say that the problem is on the supply side – there is no lack of demand. What has slowed adoption down has been the limited pace of infrastructure development to satisfy that demand. And this situation is changing rapidly as the roll-out of ADSL progresses and other services, wireless broadband and GSM broadband, become available and more affordable.
In Europe, the uptake was faster and the local loop much shorter than in SA, because the infrastructure was generally available at the outset.
Locally, demand outstrips supply and that is a situation that will work in favour of the consumer as new operators move to take advantage of the opportunities.
Yes, pricing has been a handicap thus far. However, as competition improves, prices will fall and demand will increase still further.
While big companies will stay with their dedicated line services and their sizeable data connections, the demand from smaller businesses and residential users is massive, especially with the trend towards remote and mobile workers. This is seen particularly in fields like education and healthcare.
The outlook is undeniably positive and there is hardly a doubt that broadband is the way of the future.
Just consider what this technology really enables. It is a given that it improves communication and the efficiency of doing business. Beyond that, it brings people and businesses into a global community, with access to information, services and the ability to do business – whether it is personal or commercial – in a far larger world.
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