World Cup to bolster economy

The Soccer World Cup has been a catalyst for several investments in ICT, which will stay in the ground long after the final whistle, and contribute indirectly to economic growth.

According to figures from the World Bank, a 10% boost in mobile penetration will add 0.8% to economic growth, while a 10% increase in broadband Internet penetration will bolster the economy by 1.4%.

Several ICT players, including Telkom, MTN and Dimension Data, have created telecommunication and IT infrastructure in preparation for the soccer spectacular.

Although not all the benefits of the investments can be measured in rand terms, productivity will be boosted through faster connectivity in years to come. In addition, SA will have world-class ICT infrastructure, which will encourage people to do business in the country.

Gillian Saunders, principal of Grant Thornton Strategic Solutions, says the total gross benefit to the economy from the Cup will be R93 billion and SA's economy will be bolstered by 0.54% this year.

However, measuring the benefits of the ICT infrastructure to the economy is difficult, says Birgitta Cederstrom, programme manager for Africa ICT at Frost & Sullivan. She explains that the bulk of spending went into airports and stadiums, rather than into communications-related infrastructure for South African citizens.

People in metropolitan areas, such as Sandton and Cape Town, will benefit from more WiFi and hotspots, but ICT World Cup projects have not benefited the rural areas, or the majority of people, she notes.

”It is really difficult to measure what specific improvements and new job creation will come out of the World Cup ICT projects,” says Cederstrom. She expects maintenance contracts will be signed by the larger service providers to maintain new deployments, but this may only be limited to a few hundred jobs, not thousands.

Alwyn van der Merwe, director of investments at Sanlam Private Investments, points out that R1 billion was spent on cabling and equipment for stadiums and 128 000km of fibre-optic cable was laid down.

Van der Merwe says the infrastructure will give SA an increased ability to provide business process outsourcing services for international clients, and add to the country's broadband services.

Department of Communications spokesman Tiyani Rikhotso says the World Cup will be used as a catalyst to accelerate ICT infrastructure to support and enable service delivery.

He says several projects were carried out to meet Fifa's requirements for 2010, which will serve as a legacy past 2010.

Bandwidth capacities have been boosted by accelerated installation and upgrade programmes on networks by Telkom and Neotel.

In addition, new ICT infrastructure has been developed in and around stadiums and host cities, says Rikhotso.

Karel Pienaar, MD of MTN SA, says the company's R450 million investment in improved mobile voice and data quality, capacity, speed and coverage at airports, fan parks, stadiums and roads will benefit existing communities and customers after the end of the tournament.

“MTN's existing and future investment in our network coverage is a critical piece of economic infrastructure for the country,” says Pienaar.

He explains that better communications in all the areas where MTN has rolled out infrastructure will give SA a world-class mobile communication infrastructure for mobile voice and broadband.

“The investment in new infrastructure helps us to provide better coverage and faster data speeds which, in turn, trigger thousands more customers and broadband connections,” adds Piennar.

Telkom has also invested in a next-generation network, and has laid down miles of fibre around the country. The company also received a R950 million government guarantee to build an access network for stadiums.

Thami Magazi, Telkom's 2010 Fifa World Cup programme director, says Telkom has offered to fund or buy back some of the useable telecommunications related-equipment beyond the soccer event. This could see the network going back into the economy.

In addition, Telkom's core network upgrades were internally funded, based on its forecast of customer growth and demand, and will benefit South Africans through improved communications.

Dimension Data has been involved in various aspects of providing ICT infrastructure for the World Cup.

Jason Goodall, MD for Dimension Data Middle East and Africa, says the “infrastructure to support the Soccer World Cup will ultimately create a legacy that will ensure SA is more competitive”.

The dual-listed company has been involved in technological developments in six of the 10 stadiums to be used for the World Cup. The ICT infrastructure in the stadiums is “there to stay” and has been developed to allow the facilities to be used for other events, such as concerts, open-air meetings and functions, says Goodall.

Dimension Data has also laid down a fibre network between eThekwini, in KwaZulu-Natal, and Johannesburg, which will benefit all South Africans after the end of the matches.

In addition, says Goodall, the company was involved in the communications technology for two disaster management centres in Midrand and eThekwini.

Although a Fifa requirement, these centres will later be used to better manage disasters such as the regular flooding of the Jukskei river, which puts many Alexandra residents in danger. “These world-class facilities are there to manage the well-being and welfare of our people.”

Goodall says the centres will cut down on the time it takes to respond, as well as reduce costs as emergency services will have more accurate information, which will save lives.

“A lot of the things we have been directly involved in will definitely have a long-term spin-off for the economy,” says Goodall.

In addition, the South African intellectual property developed in establishing world-class ICT infrastructure can be exported - perhaps to Brazil for when it hosts the next games.