Cold, hard truth about broadband in South Africa

The Organisation for Economic Co-operation and Development (OECD) released its latest data on broadband subscriptions (up to December 2012), showing that South Africa’s fixed broadband penetration rate is pathetically low.

The average number of fixed (wired) broadband subscriptions per 100 inhabitants in the OECD is 26.3.

With only 871,000 ADSL subscribers, South Africa only has 1.7 fixed broadband subscriptions per 100 inhabitants.

This extremely low penetration rate means that the worst country listed in the OECD report – Turkey – has a fixed broadband rate which is 6 times higher than South Africa.

The top country which is part of the OECD – Switzerland – has 43 fixed broadband subscriptions per 100 inhabitants. This is 25 times higher than South Africa.

Fixed broadband growth over time

South Africa’s very slow ADSL growth means that the country is falling further and further behind OECD countries as illustrated in the chart below.

Fixed broadband subscriptions per 100 people

Broadband penetration and GDP

Some industry players argue that South Africa’s GDP per capita should be taken into account when looking at broadband penetration rates, but as the following chart shows this argument can be challenged.

Broadband technology

Apart from South Africa’s dismal fixed broadband penetration rate, the country is also falling behind in fixed broadband technology uptake.

The latest OECD figures show a steady increase in fibre adoption, with the share of fibre subscriptions in fixed broadband increasing to 14.9%. Fibre grew by 12.7% in 2012, four times as much as fixed broadband at 3.27%.

Broadband providers are investing in fibre networks as a means to differentiate themselves from their competitors. Consumers and businesses in turn benefit from faster and more reliable networks for advanced applications, such as video on demand (VoD).

In South Africa there is a lot of talking about and trialling of fibre broadband services, but apart from businesses and a few very select areas, fibre to the premise is virtually non-existent.