In the past year the Internet user base in South Africa has seen its highest rate of growth since 2001, increasing by 12.5% to 4.5m users nationally.
These are the key findings of the Internet Access in South Africa 2008 study, released by World Wide Worx, during the Networkers at Cisco Live! conference in Johannesburg last week.
SA's internet growth is set to rise
The report explains that this growth can be attributed to a sudden increase in the subscriptions in broadband services by small businesses, which accounted for half of the growth in the market. Alongside the business growth, there has also been a continued move away from dial-up connections to broadband, with growth in both ADSL and 3G at more than 50%.
Another booming industry is the internet access offered by cellphones, which added at least 200,000 new consumers to the user base during 2008.
South Africa has a lot to look forward to, according to Arthur Goldstuck, MD of World Wide Worx, “There are three major events occurring in South Africa’s internet landscape in 2009. On the 19th of January all VANS licenses have to be converted, allowing license holders to lay down their own infrastructure and become internet service providers in their own right, in June the Seacom undersea cable lands in South Africa and in the next elections we may see a new communications minister come to cabinet.”
Reshaad Ahmed, Senior Manager of Cisco’s Internet Business Solutions Group, is also positive about South Africa’s internet future, “We believe these changes will lead to sufficient levels of competition, increased access to internet usage and in turn, increased global competitiveness and economic diversity.” Ahmed warns change won’t happen overnight. Only a few of the new providers will be in a position to manage their own networks, due to their ability to raise capital. Those that do must spend a significant amount of time building a business model that will be sustainable and innovative.
South Africa’s slow development in the internet landscape can be attributed to some major obstacles. Among these has been a highly restrictive regulatory environment, which is on the eve of change. “In that time we saw growth slow to a near standstill, and the possibility of bringing access to underserviced area becoming ever more remote,” says Goldstuck. “But the market has been anticipating this change, and numerous small, semi-legal networks have sprung up around the country in the past year. Many of these should emerge above the radar with their new licenses, along with new entrants into the market.”
“It spells the birth of an entirely new industry,” says Goldstuck.
Highlights from the study:
- 16% jump in internet providers in the last year.
- ADSL dominance is at an end. Wireless broadband subscriptions outnumber ADSL 750,000 to 558,000 in 2008.
- Broadband subscriptions leapt from 818,000 in 2007, to 1,308,000 in 2008; a 60% growth rate.
- Over next five years the projected boost in internet access will see the amount of users grow from 4.5m in 2008 to 8.4m in 2013.
- Dial-up is on the decline: from its highest subscription level of 1.08m in 2004, it has now dropped to 700,000 in 2008.
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