12 Jan 2012South Africa Broadband Overview

South Africa has one of the largest and most developed telecommunication networks on the continent. Today fixed line services are growing steadily, while mobile and wireless services are experiencing high levels of uptake. Despite this, the country needs to upgrade its fixed line infrastructure to enable wired services to compete with the more developed wireless infrastructure. Almost two decades after market liberalisation, the cost of telecommunication and broadband services still remains high compared to some of South Africa’s counterparts in both the developed and developing countries. The majority of the population, particularly in rural areas, are still at the periphery of accessing broadband services.

The telecoms sector was liberalised in February 2005. The new rules allowed VANS (Value-added Network Service) operators to offer voice services while permitting PTNs (Private Telecommunications Networks) to deploy their own facilities. However, the move did not result in significant competition. Following the election of the new government, in spring 2009 the South African National Broadband Forum developed a broadband policy framework and submitted it to the Department of Communications. The framework document based on input from business, industry and civil society groups, called for the provision of broadband access to every town and village as well as achieving the lowest broadband prices and the highest penetration on the continent by 2014. So far, limited outcomes of liberalisation and low competition had impeded the sector’s growth, and it is hoped that a coherent strategy will facilitate the necessary changes.

In its National Broadband Policy announced in July 2010, the government has set national targets of universal broadband access by 2019, with at least 50 per cent penetration among population. However, the government’s approach to this issue appears to be indecisive. A year later broadband penetration targets were made more ambitious: the ICT Industry Competitiveness and Job Creation Compact approved in July 2011 has committed to 100 per cent broadband penetration by 2020. In one of its documents the government admitted that such universal access may include access at public locations. In any case, given relatively poor fixed line infrastructure, mobile broadband will play an important role in meeting these targets.

South Africa’s ADSL user base is growing, but at a slow pace, controlled by the incumbent’s network rollout. Besides, many ISPs are focusing on business grade customers. Wireless broadband is where the real growth is and it is dominated by mobile operators. Fixed broadband ISPs are trying to expose the differences between ADSL and 3G to attract greater usage of the former by offering more and more ‘uncapped’ services and no longer separating international and local data bundles.