“Bored with your 100Mbps connection?” starts a story by Stacey Higginbotham on GigaOM. It announces that Verizon, a US telco, is about to introduce 300Mpbs broadband connections to the home. Uncapped.
This made me cry.
The world is forging ahead with innovative new uses for high-speed, unlimited data. First, they build the networks, and then entrepreneurs take this service and build applications on top of it, ranging from distance learning and telemedicine, to location-based social networking and video calls, to augmented reality and cloud services, to online gaming and streaming high-definition films for big-screen televisions. No government can do this planning.
After all, if something doesn't work, do more of it, until it does, right?
Ivo Vegter, ITWeb contributor
The benefit of innovation and technological process comes from letting thousands of smart developers loose trying to come up with the next big thing. Most will fail, but the handful that survive change the world by creating wealth, jobs, and international competitiveness in the modern economy.
But first, they need the bandwidth, at a price the majority can afford. That, sadly, is very much lacking in South Africa. Wireless data in particular is ludicrously expensive, making even such simple applications as streaming music or Internet radio unaffordable to most. That some smartphone owners find they have to fiddle with settings to turn off automatic software upgrades or reduce the frequency of social media synching is a sore indictment on the state of South Africa's broadband price and availability.
The rest of the world's schoolchildren are watching hours of live video streaming of the transit of Venus, or of the Dragon 9 docking with the International Space Station - the first-ever private mission to do so, led by Elon Musk, a South African who chose to leave the country to work his entrepreneurial magic with Paypal, Tesla Motors and SpaceX. Meanwhile, back home, many South Africans can't even afford to tweet about it.
The rest of the world is developing innovative applications that save customers time and money, while local entrepreneurs trying to solve South Africa's own unique problems bang their heads against walls trying to figure out where customers will get the necessary bandwidth for their clever apps.
At the ICT Indaba Africa Conference, this week, communications minister Dina Pule acknowledged the problem. Like every communications minister before her, she said broadband prices remain very high compared to peers such as Mexico, Chile and Hungary. The World Economic Forum's Global Information Technology Report of 2010-2011 places South Africa 61st, well behind Brazil (56th), India (48th) and China (36th) in terms of what they call “network readiness”.
Pule's solution? Regulating wholesale pricing and identifying capable Internet service providers who would be licensed to provide new, low-price broadband, complete with mandates to supply poor customers and under-serviced rural areas. She is convening a panel of experts to draft a new integrated ICT policy by March 2013.
Sound familiar? It's “managed liberalisation” all over again. It's the same strategy that got us into this mess in the first place. After all, if something doesn't work, do more of it, until it does, right?
The problem with all this central planning is that it expects a single committee to know all the answers in advance. Private, risk-taking, profit-driven companies competing aggressively for first-mover advantage constantly try to outwit each other and exploit what they refer to as “windows of opportunity”. Those windows close when investors lose interest in an infrastructure sector. Those windows close when incumbent operators get entrenched, making new competition toothless and ineffective. Those windows close when other countries develop new technologies before South African companies can even get a foot in the door, because they're waiting for the government to formulate a policy and for the regulator to issue expensive, limited licences.
Witness the insipid impact on the market of Cell C and Neotel, both of which proved too little, too late, to spur real competition. Both of them were delayed by bureaucratic inertia and legal obstructionism by rival licence applicants and established incumbents. Both of them missed the telecoms investment boom of the early part of the last decade. Both of them proved vulnerable to the anti-competitive practices of well-entrenched competition, from the mobile duopoly and fixed-line monopoly respectively. Both were stifled by the lack of availability and high cost of upstream bandwidth.
And so it will be with the latest plan to instruct the market to shape up. Matters can hardly get worse, so these central-planning dictats might indeed improve matters. But, not before the rest of the world continues to outdistance South Africa. By comparison, we'll still be left behind, with only scarce and expensive access to the infrastructure fabric of the 21st century's knowledge economy.
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