More local SMEs adopting fibre

Read time 4min 40sec

Asymmetric digital subscriber line (ADSL) usage among local SMEs has dropped from 70% in 2009 to 56% in 2018, while fibre adoption has increased to 23%, as more local businesses migrate from ADSL to fibre Internet connectivity.

This is according to interim results of the SME Survey 2018, conducted by accounting software firm Intuit QuickBooks in partnership with World Wide Worx, which tracks SME connectivity trends. The research tracks the transition from dial-up to ADSL that occurred among SMEs from 2003 to 2009, and the adoption to broadband connectivity since the introduction of fibre in 2015.

The survey, which interviewed 1 400 business decision-makers around SA, has been tracking SME trends since 2003 and is now in its final stages. The full report will be released on 27 March.

Arthur Goldstuck, principal researcher for SME Survey and MD of World Wide Worx, says the rapid fibre adoption among local SMEs was brought about by the significant rise in availability of fibre across urban areas, coupled with the falling price of the technology and the increasing uptake of bandwidth-intensive technologies.

"We are now at the stage where we are beginning to witness the decline of ADSL, as it is replaced by fibre to the home or office.

"ADSL usage peaked at around 70% in 2009 and remained at this high until 2015, when fibre arrived. The latest figures from the survey indicate that ADSL usage has now dropped to 56% among SMEs, while fibre has increased to 23% - this is exciting, because it means that the adoption of fibre is taking place even more rapidly than the adoption of ADSL did 15 years ago," he continues.

The switch from ADSL to fibre, notes Goldstuck, is being driven by much the same reasoning as the earlier move from dial-up to ADSL. As SMEs adopt cloud technologies and other digital transformation tools, they see a clear value proposition, and are more than willing to embrace it rapidly.

"This is a huge shift and is extremely exciting for SMEs and accountants in South Africa," says Wendy Walker, head of Marketing at Intuit QuickBooks. "We have witnessed how the use of technology such as the cloud has reshaped and reinvigorated businesses across the globe and we have no doubt will we will see the same impact here. Whether it's evolutionary or a new disruptive innovation, SMEs are always looking for technology that will help deliver better services and products, and of course, greater returns for their businesses. That's what we are here to provide."

Goldstuck goes on to explain that with fibre, the cost to speed relationship is vastly improved, while the quality of the connection is also higher: "Another aspect that differentiates fibre fundamentally from ADSL is that any service provider can supply connectivity and services over fibre. This is very different to the South African ADSL market, where there is essentially still only one provider for the technology. This diversity has clearly helped open the market, thanks to the increased competition."

According to a report from BMIT titled: "The Fibre Land-grab: Status of FTTX in South Africa, 2017", it won't be long before fibre overtakes DSL in South Africa.

"Fibre overtook copper globally in 2016. We are not there yet, but the crossover point is looming ever closer, thanks to aggressive, pre-emptive investment, demonstrating confidence in entrepreneurial open access players," says BMIT director Brian Neilson.

BMIT analysed the home and business broadband markets in September 2017, and arrived at revised forecasts, showing the likely substitution impact of fibre on the DSL installed base.

A study conducted by accounting software firm Xero in January, revealed that over half (52%) of small businesses in SA admit that they are at the primary level of technology adoption, while a further 45% acknowledge that they could be doing more to transform digitally.

Gary Turner, MD of Xero, EMEA, explained: "Small businesses in SA are proactive about keeping up to date with technology, but the predominance of outdated legacy processes and systems suggests that they have some way to go yet. The findings demonstrate that poor Internet connectivity holds them back. Almost half (41%) of entrepreneurs cited maintaining a stable connection in their workplace as a key challenge, according to the study findings. The main consequences of poor Internet connectivity are lost time (56%) and frustrated employees (26%). The advantages of technology can only be maximised when there is reliable and affordable connections."

According to a Microsoft study released in June 2017, 48% of South African organisations had already begun a digital transformation journey at the time, and 44% were planning to do so within the next 12 months.

In February 2016, Telkom launched a fibre-to-the-home trial, where thousands of ADSL users across South Africa were migrated to the broadband technology free of charge.

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