SA hits 5m Net users

In what is being considered a significant milestone for communications in the country, the number of South Africans to have access to the Internet has hit the five million mark.

Research conducted by local analyst house World Wide Worx, in conjunction with Cisco, shows that local Internet penetration has increased to 10%.

Speaking to ITWeb this morning, research lead and World Wide Worx MD Arthur Goldstuck said this figure is a significant milestone in SA's Internet space.

He explains that, over the last year, there has been an acceleration in penetration, showing a 15% increase in the number of users with access to the Internet, from 4.6 million users to 5.3 million. “The good news is that we will continue to see strong growth in 2010, and we should reach the six million mark by the end of the year,” he adds.

The penetration is calculated by the number of individuals who have access to the Internet - whether it is through work or connecting from their own home Internet providers.

According to Goldstuck, there has also been a shift in the socioeconomic status of users getting their hands on access to the Internet. “The higher economic positions, between LSM 8 to 10, are almost saturated, and the new figures show the middle classes are now taking up Internet services,” he notes.

However, he says there is still work to be done at the grassroots level. “People in the lower LSMs still don't know what the Internet is.”

Despite one of the world's highest level of mobile penetration, most South Africans are still not using phones as a method of accessing the Internet. He explains that, while many phone owners use applications, like Mxit, that require Internet connectivity, it is not necessarily considered using a phone to access the Internet.

SA's previously slow growth in Internet penetration has largely been thanks to extremely high costs of access, limiting growth to the wealthy, he notes.

Goldstuck says new developments in local Internet technologies have had a hand in the rapid increase in Internet take-up in SA. “The Seacom undersea cable has had a dramatic indirect affect on the pricing of Internet access.”

With local operators also laying fibre, there is likely to be another growth spurt. “In the coming year, operators will begin to leverage the combination of new undersea cable capacity and new fibre-optic networks to supply corporate clients and resellers with bigger, faster and more flexible capacity,” notes Goldstuck.

He says almost every large player in the communications industry has realigned its business to take advantage of this “relentless change”.

Growth in the lower socioeconomic reaches will also improve over the next few years, specifically with local broadband projects, like the recently announced Joburg Network Broadband Project, bringing access to rural communities, he adds.

However, Goldstuck explains that these projects will need to shift away from the traditional price models that have been implemented by SA's Internet service providers. “Those project leaders will need to make Internet for the pockets of the people they are trying to sell to,” he notes.

World Wide Worx will release the final Internet Access in SA 2010 report in March. It is expected to take an in-depth look at the impact of the undersea cables and the fibre networks being rolled out by all the operators around SA.