What Ramaphosa must really do to improve broadband in South Africa

President Cyril Ramaphosa recently unveiled the government’s economic recovery plan, which included plans to reduce data costs and expand broadband access to low-income households.

He highlighted that the release of high-frequency spectrum by March 2021 and the completion of digital migration will reduce data costs for firms and households.

The government is also “developing innovative new models to provide low-income households with access to affordable, high-speed internet through connection subsidies for broadband and support for public Wi-Fi hotspots”.

People who have been following the broadband industry for the past decade would have a distinct feeling of déjà vu.

Ramaphosa’s comments are nothing new and have been repeated numerous times over the latest few years.

It has come to very little, with South Africans still waiting for digital migration to be completed and operators still waiting for spectrum.

To get an idea of what the government must really do to improve broadband in South Africa, MyBroadband asked industry players for their feedback.

Complete digital migration

Vodacom said one of the most impactful contributions the government can make to drive down data prices and ensuring wider broadband accessibility is to complete the digital migration process.

“Whilst we are appreciative of the fact that ICASA provided access to spectrum on a temporary basis because of the National State of Disaster, the benefits to customers would have been greater if mobile operators had full access to high-demand spectrum, currently occupied by analogue TV channels,” Vodacom said.

Vodacom highlighted that ICASA is now following a process to license this high-demand spectrum early next year, and said it is important to know in advance of the auction when the digital migration will be completed as this will have a bearing on the value of related lots.

Policy reforms to address easier and wider access to infrastructure sharing amongst the industry is another key area where the government can make a positive impact.

The company added that operators contribute to the Universal Service and Access Fund, which was established to fund projects that strive to achieve universal service and access to ICTs by all South Africans.

“Achieving these objectives will also positively impact broadband access in underserviced areas,” Vodacom said.

Lower import duties and taxes on smartphones and 4G/5G devices will also make the benefits of broadband more accessible, thus helping to bridge the digital divide.

Cell C also asked for a clear and enabling policy and regulatory environment for effective competition and collaboration between infrastructure players and spectrum owners.

“This will enable the industry to get a better yield from infrastructure and drive digital inclusion for all which will have economic benefits,” it said.

Wholesale rates and wayleave approvals

Afrihost, in turn, said compelling mobile operators to offer reasonable wholesale rates for mobile data to ISPs will go a long way to drive down mobile data prices.

“The key is that these wholesale rates must be lower than the MNOs current retail rates,” Afrihost said.

Wholesale mobile data rates are currently 10 times more expensive than retail mobile data rates, effectively eliminating all ISPs from this market.

“If this is done, there is ample proof that the existing fierce competition in the ISP industry would bring mobile data rates down immediately,” Afrihost said.

Vumatel believes that alignment between government and the private sector is critical to close the digital divide and enable greater accessibility to abundant, fit-for-purpose fibre connectivity.

“But it is also about creating an environment that let the private sector do what it needs to – unhindered by things like business forums,” Vumatel said.

It added that expediting processes for builds such as wayleave approvals will also help fibre rollouts.

Cybersmart founder Laurie Fialkov said the only thing the government should do to improve the cost of broadband is to stay out of it.

He said ensuring a stable electricity supply and not having the state compete against commercial telecoms networks will also help.

Just like Vumatel, Fialkov said developing a process to expedite wayleave approvals will make a big difference in fibre rollouts.

He would also like to see the government sell its shareholding in Telkom and use the money to build houses and fight crime.

“To start interfering in one of the few growth industries that is creating thousands of jobs is not where they should be focusing,” he said.

What operators and ISPs say

The table below provides an overview of comments by South African operators and ISPs on what the government should do to improve broadband access.

How to improve broadband in South Africa
Operator/ISP Comment
Vodacom Complete digital migration, policy reforms for infrastructure sharing, and lower import duties and taxes on smartphones and 4G/5G devices.
Cell C A clear and enabling policy and regulatory environment for effective competition and collaboration between infrastructure players and spectrum owners.
Rain The spectrum auction framework recently announced is a step in the right direction.
Mweb Clarification on the government WOAN plans and speeding up the WOAN process will help achieve the government objective.
Webafrica For fibre rollouts, a faster wayleave approval process coupled with tax breaks for companies who are subsiding installations would go a long way to help.
Afrihost Compel the mobile network operators to offer reasonable wholesale rates for mobile data to Internet Service Providers.
Vumatel Expediting processes for builds such as wayleave approvals, and creating an environment that let the private sector do what it needs to do.
Cybersmart The only thing the government should do to improve the cost of broadband is to stay out of it.
Supersonic Give SMEs access to government grants, helping them build infrastructure which will enable them to provide decent and affordable internet solutions in low-income areas.
MTN No comment.
Telkom No comment.

Now read: Ramaphosa’s big broadband promises for South Africa

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What Ramaphosa must really do to improve broadband in South Africa