SA losing role as Africa`s technology leader

Johannesburg, 27 May 2004

It is extremely ironic that the South African government`s legislative efforts that affect new technologies like voice over IP (VOIP) and wireless fidelity (WiFi) are actually working against the development goals it is hoping to achieve.

This is the view of Bridges.org, an international non-profit organisation that promotes the effective use of ICT in the developing world, with the aim of reducing poverty and improving people`s lives.

In a recent report, the organisation claims that unless government aligns its intentions with its actions, it may soon undermine the country`s position as a technology leader in Africa, which would go against the ICT strategy laid out by the ANC.

One example is SA`s strategy to create jobs by enticing international call centres to the country.

These centres, which are common in places like India, provide outsourced services using high bandwidth connections and VOIP platforms, with the VOIP converting calls to data and carrying them like messages on any data network (including the Internet), which lowers costs, but can threaten the earnings of traditional telecommunications providers.

Bridges.org suggests that VOIP can also support socio-economic development more generally, by bringing the benefits of efficient data network use and lowered call costs to individual consumers, small businesses and community organisations, except that existing legislation limits the use of VOIP and stifles advances in this area.

"A lot of players in the call centre industry live or die by bandwidth and VOIP issues, so a change in legislation regarding this is very necessary for the industry to flourish," says Rod Jones, MD of Call Centre City.

"Because the rates for fibre are more prohibitive, players want to turn to VOIP. If government were to relax the VOIP restrictions, it would drive down tariffs and allow SA to compete on an equal footing with call centre hubs like India.

"If we can compete evenly with India, we will win, as our infrastructure is far stronger than theirs. Not only that, but if we can compete, there is the potential for some 100 000 jobs to be created in our industry," he says.

Law inhibits WiFi

Another issue raised by Bridges.org is that SA law also inhibits the use of WiFi technologies that could help bring the Internet to underserviced communities.

WiFi creates a high-bandwidth network using certain radio frequency transmissions that cover short distances, and is cheap to implement, largely because it does not require traditional wire infrastructure, and can be used to extend the reach of telecommunications and "backbone" Internet connectivity at low cost.

There are huge cost savings to be gained in underserviced communities by rolling out technologies that allow for both voice and data services on a single, combined, cost-effective network.

The organisation points out that SA is in danger of losing its status as Africa`s technological leader, as other African countries - notably in East Africa - are moving to the forefront.

Algeria, Mauritius, Mali, Nigeria and Kenya have all legalised VOIP and WiFi and it seems that these progressive governments are embracing new technologies in order to gain the long-term benefits of ICT, despite potential short-term losses in revenue as incumbent telecommunications providers restructure their approaches.

The report points out that it appears as if government policymakers either do not understand the development potential offered by these technologies, or they are just not ready to let go of the entrenched revenue streams from Telkom`s stranglehold on the market.

"East Africa is watching what is happening in SA and these nations are learning fast and deploying their own call centre operations to rival SA`s," says Jones.

"The East African countries have strong IT and language skills and are now starting to come to the party in terms of their rates as well, so they could pose a huge threat to SA in the near future."

Bridges.org suggests that removing restrictions and allowing competition to thrive in the communications sector will lead to greater choice, lower prices, and the proliferation of innovative services.

Open approach needed

"The Communications Users Association of SA (CUASA) has long made the point that the restrictions on VOIP are holding the country back and the Telecommunications Act is long overdue for on update," says CUASA spokesman, Ray Webber.

"We have said this same thing so often that we`re almost getting tired of constantly repeating ourselves."

He says CUASA can only support the view put forward by Bridges.org, because both organisations feel SA is beginning to fall behind because of these restrictions.

"We definitely need a more open approach to technology if we don`t want to find ourselves losing out to other African nations," says Webber.

At present, all that is holding back the unlimited provision of VOIP services in SA is the public announcement of a date, at the discretion of the minister of communications, from which VOIP will be legal.

"This has been the case for quite sometime already, and highlights the fact that nothing much has changed in this regard," he says.

"Now that the election uncertainty is over and the ministerial portfolios have been assigned, CUASA would like to urge the minister to resolve the outstanding issues - notably VOIP, WiFi, the second national operator licence and the Convergence Bill - that are currently on her table."