Broadband: SA versus the world
It is no secret that South Africa continues to fall further and further behind the developed on broadband services available, but the question is just how dire the situation has become. A quick look at the latest broadband statistics from the OECD points to a significant gap between South Africa and the OECD countries in terms of broadband penetration rates and broadband service quality.
This should get the alarm bells ringing. In a recent OECD report on the ‘role of communications infrastructure in economic recovery’, the importance of well developed broadband networks is highlighted.
“Broadband networks are increasingly recognized as fundamental for economic and social development. They serve as a communication and transaction platform for the entire economy and can improve productivity across all sectors. Advanced communication networks are a key component of innovative ecosystems and support economic growth,” the report states.
South Africa is unfortunately on the wrong side of the digital divide which negatively impacts on the ability of businesses in the country to compete against their international counterparts. This in turn hurts the local economy, especially in tough economic conditions where increased efficiencies and cost cutting is necessary to survive.
Broadband penetration rates
The December 2008 OECD Broadband Statistics show an average broadband penetration rate of 22.6 (broadband subscribers per 100 inhabitants). The leading countries, Denmark, Netherlands and Iceland, have broadband penetration rates of 37.2, 35.8 and 32.8 respectively.
The Slovak Republic, Turkey and Mexico are the three worst performing countries on broadband penetration rates with 11.5, 7.8 and 7.2 broadband subscribers per 100 individuals respectively.
Despite the strong growth in wireless broadband access over the last few years, the picture in South Africa still looks far worse than in Mexico or Turkey. In December 2008 South Africa had approximately 1.35 million broadband connections. This constitutes a broadband penetration rate of 2.81, significantly lower than the worst countries in the OECD.
Broadband quality
South Africa’s quality of broadband services, specifically in the fixed line market, does not compare well with countries in the OECD. According to the OECD statistics 20 Mbps broadband connections were available in all but two OECD countries.
While the majority of broadband connections in the OECD are made up of DSL and Cable, the upgrade to fibre-based broadband connections is gaining momentum. Fibre subscriptions now comprise 10% of all broadband connections in the OECD, up from 9% a year ago. Twelve of the thirty countries surveyed offer broadband speeds of 50 Mbps (or more).
Wireless broadband services, offering speeds of up to 7.2 Mbps, provide the fastest access available in South Africa. Wireless services account for over 60% of all broadband connections in South Africa, a stark comparison to the OECD where fixed line services account for well over 95% of all connections.
The shortcoming of wireless broadband services – including low usage limits and high pricing compared to fixed line offerings – becomes clear when South Africa is compared to OECD countries in terms of price and service levels.
On average DSL subscribers pay USD 40 per month for a broadband service while Cable subscribers pay an average of USD 45 per month. These DSL and Cable connections are typically uncapped, Multiple-Mbps connections.
The percentage of broadband offerings with explicit data limits – aka bit caps – is declining across the OECD. In September 2006 only 36% of observed broadband plans had an explicit data cap. When operators limit the amount of traffic that broadband subscribers can use each month the average data transfer allowance is 27 gigabytes.
In South Africa the situation looks vastly different. While broadband prices start at around USD 68 (R 554) for a 4 Mbps connection, the monthly cap of 3 GB is significantly lower than the OECD average. Wireless broadband services can offer speeds of up to 7.2 Mbps for around USD 50, but the monthly usage limit of 2 GB is not sufficient to compare it with typical international DSL or Cable connections offering the same speed.
Nothing new
The poor state of South Africa’s fixed line broadband environment is nothing new. While Vodacom and MTN have invested billions of Rands in deploying the latest mobile technologies, the limitations and costs associated with mobile broadband services means that South African broadband users are still lagging very far behind the international community in terms of true broadband access.
This is one of the main driving forces behind the South African National Broadband Forum (SANBF) who is planning to lobby Government to address the poor state of broadband in South Africa. Many skeptics feel that this initiative will – like many others preceding it – result in nothing more than a few talk shops and empty promises from Government, but the SANBF is confident that the new Government and a fresh Department of Communications may be what is needed to make a broadband strategy work this time around.
Broadband: SA versus the World – give your views
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