WIDENING THE WEB
Mobile phone operator MTN is attempting to do what government agencies have so far failed to: provide low-cost Internet access to the poor.
The company has launched a pilot project that will enable 10 entrepreneurs who operate community service telephone sites in townships around Johannesburg to provide cheap Internet access and other computer services to their communities.
Similar attempts by government, such as programmes launched by the Universal Service Agency, have not made any real dent in the problem. But MTN’s approach is different and bears watching. It’s not a social development project and the company makes it clear that it is out to make money from the venture.
MTN wants to become the dominant provider of Internet access in SA and is targeting Telkom What the cellphone companies have done — extending voice telephony to areas that previously had no communication service — MTN believes it can do with Internet access. MTN SA MD Maanda Manyatshe says the company is well positioned to provide the “Internet dial tone” for emerging markets. He was speaking at the launch of the MTN@ccess project in Alexandra, northern Johannesburg.
Ashraff Paruk, who heads strategy and product innovation at MTN SA, says other such programmes have fallen flat because they did not operate on a sustainable business model.
Paruk says the pilot project will be used to develop a business model that sees small enterprises running the service points as profit centres. He concedes, however, that he does not expect MTN to make a big profit from the sale of Internet access.
This does not worry him, as he believes cheap Internet access will increase the awareness of the technology in the townships. MTN, he says, will make real money selling computer and Internet airtime bundles.
Internet Society chairman Alan Levin says MTN’s initiative is laudable, but he warns that the problems of providing cheap Internet access might be too big for even the cellular giant to tackle fully. Accessing the Internet is expensive because the cost of getting access to international content is too high. With an estimated 50% of all Internet content being downloaded from abroad, and Telkom having a monopoly over international telecom cables, MTN will have to do some serious negotiation with Telkom if it wants to provide really cheap access, Levin says.
MTN is not deterred. Paruk says the group has learnt its lessons deploying its GSM and third-generation networks. When these services were first launched, MTN made the mistake of assuming that they were for the elite only and would be relatively expensive.
Like its rival Vodacom, MTN was at first unprepared for the surge in popularity in cellphones and then disappointed by the lacklustre interest in 3G.
By going after the low end of the Internet market, MTN hopes to be able to become market leader if and when demand for Internet services takes off.
MTN believes it will succeed where others have failed. Since 2001, government, through the Universal Service Agency (USA), has deployed 374 telecentres to provide basic telephony and computer services. How effective these centres are, however, is unknown, because the agency is still conducting research into how they are being used.
Besides operational problems, a lack of legislative oversight is also hampering the USA. The Telecommunication Act makes no provision for the USA to provide seed funding for these centres, says acting CEO Motlatso Ramadiba
Ramadiba says the USA is contracting IT companies to provide maintenance services and to train the centre’s managers, and is developing a governance model for the centres.
The Post Office, which will have deployed 698 of its “public Internet terminals” (Pits) by the end of June, mostly in remote towns and villages, has also run into problems. The public can use the Pits to get access to the Internet for a small fee. Access to government websites is free.
But vandalism of Telkom lines has undermined the service, as has the remoteness of the locations where they are installed, which makes it difficult to service the terminals, according to Post Office group executive for corporate services Twiggs Xiphu.
Another problem for the Post Office is that few people in the rural towns know how the terminals work. Many don’t even know what the Internet is and what it offers. To deal with this, the Post Office has contracted volunteers to help demystify the services offered by the terminals.
INet-Bridge || Discuss this article
Loading ...