SA's ICT uptake 'very weak'

South Africa's preparation and uptake of ICT remain very weak, according to the World Economic Forum's (WEF's) Global Information Technology Report 2010-2011.

The WEF, in an assessment, says sub-Saharan Africa's networked readiness continues to be disappointing, with the majority of the region lagging in the bottom half of its Network Readiness Index.

It notes that though ICT penetration rates have soared in the region over recent years, boosted by mobile telephony, and many countries have started to leverage more ICT to improve efficiency and reach out more to citizens, sub-Saharan Africa does not seem to have progressed as much and as fast as other areas of the world.

The report blames underdeveloped infrastructure, inefficient markets, opaque regulatory environments, inadequate educational standards, and poverty as obstacles against a more extensive and efficient use of new technologies for increased development.

Out of 138 countries on the Network Readiness Index, the latest Global Information Technology Report places SA at number 61, one step up the ladder from 62 in 2009-2010. However, as early as 2006-2007, the country was sitting at a modest number 47.

“SA is characterised by a well-developed financial market (6th) and venture capital (39th), favourable laws relating to ICT (32nd), strong intellectual property standards (27th), and low software piracy rate (18th), among other advantages,” the reports says.

It, however, attributes SA's weak ICT preparation and uptake to its poor educational standards, notably in science and mathematics (136th), as well as to the very high ICT access costs prevailing in the country.

“SA ranks 129th for residential monthly telephone subscriptions, and 107th, 102nd, and 79th for fixed telephone, mobile cellular, and fixed broadband Internet tariffs, respectively,” it says.

“We need government to help revitalise a 2020 vision. All that government has to do is set a long-term vision going forward until 2020 and industry will do most of the rest.”

Frost & Sullivan analyst Dr Vitalis Ozianyi says one major contributor to the slow progress in the region is inadequate funding of ICT projects and low purchasing power of a large proportion of the population.

“Although governments in the region have shown interest in adopting ICT in governance, ICT projects are placed in the back seat when compared to higher priority projects,” he says.

On the other hand, Walter Brown, project manager of the SACF, notes that there are no simple answers to the slow progress.

To come up with a concrete answer, Brown says one has to look at how nations prioritise the enabling nature of ICT - the recognition that access to information for development can be cost-effectively delivered via ICT across all growth sectors.

“One also has to consider the deep income inequalities that plague most sub-Saharan nations, especially SA - a global leader in income inequalities.

“This renders the reliance on market forces alone to foster development of ICTs largely impractical - a small wealthy segment of the population able and willing to pay high prices for ICT access, alongside a vast population that can barely afford to use even the most basic ICTs.

“This skews the market drastically and creates immense dilemmas for ICT companies that must compete locally with each other, and on a global scale,” Brown points out.

According to Brown, the paucity of the requisite knowledge of the relationship between ICT and socio-economic development at the political and public sector leadership levels of sub-Saharan Africa also leads to poor decisions on the development of appropriate visions and strategies for the growth of the ICT sector.

On why SA's rankings have plummeted on the Network Readiness Index since 2006/07 to 2010/11, Brown says this is, fortunately, being recognised by both government and the national ICT industry, although effective responses to this challenge have yet to be developed.

One fundamental reason for this situation, he explains, is, once more, the country's deep income inequalities.

“Leading ICT industries, including new entrants like Neotel, for example, are virtually obliged to compete in the high income economic segment for survival at the expense of both national development and poverty alleviation through ICTs.

“In the opinion of SACF, it is imperative that this challenging situation is developed through close dialogue between government and the ICT industry - simple solutions such as forcing prices down to render them more affordable to SA's poor are likely to cause more harm than good, but maintaining the status quo is perhaps even more destructive in the long-run,” he notes.

Ozianyi agrees with the World Economic Forum's findings. “The report pointed at poor education standards in maths and science as one of the negative items about SA, with high cost of ICT services being the other.”

He says between 2007 and 2011, the cost of ICT services around the world has been declining at a faster rate than SA.

“This means consumers and businesses are restrained in the uptake of innovative ICT services and remain content with basic telephony and data communications.

“A limited supply of engineers and scientists resulting from poor transfer of science and mathematics skills makes SA ignore production of ICT applications that match social and economic needs of the broader population,” states Ozianyi.

Commenting on why SA's individual preparation and uptake of ICT remain very weak, Ozianyi says this is because a larger part of the population is content with the traditional way of communication and conducting business.

“On face value, communication costs remain high in SA, hence with lack of applications and services that can transform these costs into saved time and expenses for performing something as basic as consulting a physician, most people would prefer to queue at the hospital.”

SA ranks 129th for residential monthly telephone subscriptions, and 107th, 102nd, and 79th for fixed telephone, mobile cellular, and fixed broadband Internet tariffs, respectively, the report also states.

Says Brown: “The simple answer is that the legacy of apartheid remains strong, the reversal of this legacy is extremely complex, but mandatory and urgent.

“STATS SA's most recent household survey which estimates that only 26.8% of households in our country have at least one member who is able to use the Internet - effectively 2.5% penetration by population on this basis - and that only 0.9% of households have a fixed-line telephone connection, the preferred entry level of broadband via ADSL, is a valid starting point.”

On the other hand, Ozianyi says the South African telecommunications market remains very regulated.

“This has slowed the appetite of major telecommunication providers to diversify revenue sources. Thus, telephony and broadband remain the prime means to achieve margin targets. All these factors make it hard for telecommunication providers to lower the tariffs.”