To experience true Broadband

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Dr. Angus Hay, CTO of Transtel, said that to experience true broadband one needs a speed of 1 Mbps or more. Dr. Hay was speaking at the recent Institute for International Research’s 2006 Broadband Africa Summit.
 

There are currently only four broadband offerings which can achieve 1 Mbps, namely Telkom’s DSL 1024, WBS’s iBurst and the new HSDPA service launched by Vodacom and MTN.

Hay said that while we still do not have offerings like triple play or IP-TV in South Africa, he is confident that these services are definitely on their way. These value-added services will however require much higher bandwidth than what is currently offered.

Telkom’s Harald Ruck reaffirmed the need for faster broadband pointing out that these services will require bandwidth in the order of 4 Mbps, but that true triple play offerings perform best on bandwidths of 10 Mbps upwards.

Increased broadband penetration in South Africa is another point that Hay touched on noting that the GDP per capita increases significantly with an increase in Internet penetration.

A particularly telling statistic was that around 70% of the South African economy is service and trade based. This sector will benefit greatly from improved broadband services and reduced prices, and in fact needs to be connected to compete against their international counterparts.

To ensure that South Africa fall in line with international standards both on speed and penetration, which is linked to price, requires strong competition in the telecoms sector.

Hay further questioned the low target of 1 million South African broadband connections in 2009, saying that a figure of 5 million may be more appropriate.

He conceded that there are many challenges like the low fixed line and PC penetration, but believes that ambitious targets are needed to ensure local economic growth. Without competition it is difficult to motivate the only fixed line operator to invest revenue to make their services and prices more competitive.

Hay said that an incumbent will always charge too much for their services in a monopolistic environment. This is particularly telling in the local ADSL arena, where the cost of the Telkom’s ADSL service is around 1000% more expensive than international standards.

With the price to get connected to the Internet far above what the average South African income earner can afford it is currently difficult to significantly boost broadband penetration. Prices need to fall before we see mass uptake of this technology.

But this point has been made countless times by numerous experts and even from delegates from within the Department of Communications.

Unfortunately backing up this statement with action is what is sorely lacking in the local telecoms arena.