Broadband closes in on 1m milestone

By Nicola Mawson for Telkom
Johannesburg, 05 Jan 2007

Broadband is expected to be a major trend this year, and is anticipated to shape other trends going forward, including having an impact on stagnant Internet users in the next few years.

Arthur Goldstuck, MD of ICT research firm World Wide Worx, says SA's IT landscape is in a three-year cycle that started in 2006, and is expected to culminate in 2008. As a result, he says, 2007 will be a rather important year, as it will provide a "good picture" of what will happen locally next year.

Broadband is expected to show "massive" growth, albeit off a low base. By the end of 2008, Goldstuck expects that over a million people will be on broadband.

Of these, just over 500 000 are expected to be Telkom users, with almost another 500 000 subscribers being shared by wireless providers, iBurst and Sentech, he says.

Vodacom, 50%-owned by the fixed-line operator, recently made a move on 10% of iBurst. An analyst recently said iBurst is currently performing well, and is expected to gain market share, while Sentech seems to have stagnated over the last 18 months.

Telkom's latest figures - by the end of September last year - indicate that it had 4.73 million lines, a year-on-year reduction of 1.2%.

However, Telkom has seen rapid growth in ADSL lines, with 190 172 ADSL subscribers by the end of September. This was a 99.6% growth in subscribers year-on-year.

Goldstuck's predictions mean that by the end of 2008, the fixed-line provider should have just over 10% ADSL penetration, boding well for it to hit its 15% to 20% target by 2010.

"I see no reason why [Telkom] shouldn't reach these targets."

Growth in broadband allows Telkom to avoid rectifying its falling fixed-line numbers, he says. However, Goldstuck says these numbers are not falling drastically and are not expected to impede Telkom's ability to roll out broadband in the near future.

Stagnant Internet population

However, Goldstuck points out that SA's Internet population has become stagnant, mostly as a result of declining fixed-line growth and the costs associated with being online.

Once the cost of broadband reaches similar levels to that of dial-up, the number of Internet user is expected to grow, he says.

Within the next two years, most of SA's online population will have been surfing for six years, and this maturing market will take online to the next level, predicts Goldstuck.

He expects online to be the major beneficiary of this trend, but cautions that comparative shopping will take hold. In addition, while blogging in the US is peaking, according to Gartner, here it will take off.

The US-based research firm predicts blogging and community contributors will peak in the first half of 2007.

"Given the trend in the average lifespan of a blogger and the current growth rate of blogs, there are already more than 200 million ex-bloggers. Consequently, the peak number of bloggers will be around 100 million at some point in the first half of 2007," says a statement released last year.

Voice over IP is expected to grow rapidly and telecommunications companies will have no choice but to embrace the data age, he says. "Do they embrace it or try to fight it?" he asks of the quandary facing operators.

Currently, telecoms companies are trying to stave off VOIP, but consumers will find ways of circumventing rules, forcing telecoms firms to "come to the party".

Data

A trend associated with both VOIP and broadband is the predicted move to data as core of the telecoms network.

Telkom has already started making progress in this regard with its next-generation network.

Neotel will leapfrog the need to replace legacy systems and Africa is also expected to benefit from this shift. Goldstuck points out that the advent of WiMax as a viable alternative will allow SA and the continent to take advantage of data streaming.

In the short-term, Neotel is not expected to make a huge impact on the local market, but its presence is expected to be felt from 2008 onwards, he says.