Internet usage booms

By Alex Kayle, Senior portals journalist

Johannesburg, 05 Dec 2008

The South African Internet user base has increased by 12.5% since 2001, to 4.5 million Internet users.

This is the highest growth rate since 2001, according to the Internet Access in SA 2008 report, compiled by World Wide Worx, and released yesterday during the Cisco Life Conference, held at the Sandton Convention Centre.

“It's the first time we've had double-digit growth in Internet connectivity since 2001 and the industry anticipates a further 13.3% growth in 2009,” says Arthur Goldstuck, CEO of World Wide Worx.

Goldstuck explains that the growth occurred as the industry predicts that next year will see the biggest shake-up in South African Internet access since the dawn of the Internet in 1994.

Research shows that, in the next five years, there will be strong growth in Internet access from this year's 4.5 million users to 8.4 million users in 2013.

Future undersea cables

In June next year, Seacom, Eassy and Infraco will launch undersea cables and SA's international bandwidth is expected to increase 40-fold within the next five years.

Reshaad Ahmed, senior manager of Cisco's Internet Business Solutions Group, predicts this will result in increased Internet access and usage. However, connectivity pricing will not decrease dramatically, if at all, but rather Internet subscribers will receive more bandwidth capacity for their rand, he adds.

Goldstuck points out that, once broadband becomes widely accessible and cost-effective, it will mean the end of the dial-up connection, which he maintains is no longer a viable connectivity option. Dial-up Internet access plunged from 908 000 subscriptions last year to 700 000 in 2008. In 1994, there were 15 000 subscribers, with the numbers reaching their peak in 2004, at 1.088 million.

“Once everyone who is connected is on broadband or high-speed networks, the Internet will come into its own as an environment for business collaboration and personal interaction,” says Goldstuck.

Competition liberated

The report showed 2008 saw a 16% increase in the number of Internet service providers in SA due to new policies.

Last month, the Independent Communications Authority of SA stated it will convert value-added network service providers' licences to electronic communications network service and electronic communications service licences. This is expected to commence on 19 January 2009.

Ahmed says the liberalisation of competition could see SA potentially going from five major service providers to more than 300 overnight. “Only some of the 300-plus contenders will be in a position to manage their own networks due to their ability to raise the necessary capital. Those that do step up to the challenge must spend a significant amount of time building a business model that will be sustainable, innovative, and takes advantage of the strategic position with which a contender is faced, while employing the capabilities of existing service providers.”

Ahmed says the combination of new licensees, policy directions and municipal networks has set the stage for a highly competitive telecommunications marketplace, with consumers having more choice and fair market value.

In addition, the report showed that wireless broadband subscriptions overtook ADSL during 2008 as demand for mobility amplifies. Last year, there were 440 000 wireless broadband users, which has increased to 750 000 users this year. This is compared to ADSL growth levelling out from 378 000 subscriptions last year to 558 000 this year.

Broadband subscriptions, in total, passed the 1.3 million mark this year, from 818 000 last year, resulting in a 60% growth.

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