ICT environment in sub-Saharan Africa

A couple of recent articles from www.mybroadband.co.za highlight some of the key issues surrounding the ICT curve in SSA. 

SA’s broadband and ICT environment worsen

By Hilton Tarrant, Moneyweb, 31 March 2007 A report released yesterday by the World Economic Forum shows that South Africa has fallen ten positions in the Networked Readiness Index.   While many will be tempted to say that our broadband access has increased, costs have come down, and regulation is improving, this definitive study shows that SA is simply not keeping up with the rest of the world. The report, officially titled “The Global Information Technology Report 2006-2007” (GITR) compares 122 economies worldwide in the following areas: The regulatory/infrastructure environment for ICT; The readiness of individuals, businesses and governments to use and benefit from ICT; The actual usage of the last technology available. Soumitra Dutta, one of the co-editors, explained that the report basically “provides a snapshot of countries’ weaknesses and strengths with regard to ICT development”. The CEO of Cisco, John Chambers, is quoted as saying “its no longer debatable whether… the global economy will become networked… the discussion now focuses not on if but how we get connected”. While the use of complicated terminology and measurement categories would be expected in this type of report, the overall prognosis for the ICT landscape in SA is not a good one. Africa a particular focus The report itself highlights developments – or lack thereof – in sub-Saharan Africa as “less positive” than the rest of the world: “traditional ICT champions in the region are all losing ground”. It says that while “this region has increased its ICT penetration rates” of late, “it has not moved fast enough compared with the rest of the world”. This year’s report highlights four case studies, most importantly sub-Saharan Africa (the others are: Estonia, Japan and China). The report acknowledges that “there is a perception that sub-Saharan Africa may have missed the boat” when compared to other regions (especially Asia). Yet, IMF economist Markus Haacker emphasises that ICT is making a real contribution to this region. The unique strength of this area is the penetration of cellphones. In conclusion, Haacker says that while it is true that sub-Saharan Africa has “not benefited to the same extent as some countries”, from a “microeconomic standpoint” Africa “disproportionally” benefits for advances in ICT. He argues that advances have made doing business “substantially”easier. South Africa compared South Africa is positioned at number 47 now (out of 122 measured), but how do we compare? Although we scored a mark of four, compared to Denmark’s 5,71 rating, we rank behind many other countries we should be ahead of. The hotbed of ICT action that is Barbados is a new entry at position 40! Jamaica also beats us (at 45), with Mediterranean island nations Malta and Cyprus both one-upping SA. Conversely, countries you’d hope are way ahead of us, are only marginally better than SA. India, for example, scores a 4,06, only three positions higher than ours! Key measurements for South Africa: Internet users per 100 inhabitants: 10,8 Internet bandwidth: 0,2 Mbps/10 000 inhabitants One could argue that our internet users figure compares quite favourably with first-ranked Denmark (52,6 per 100 people). However, South Africa’s bandwidth situation is dismal. Denmark has 348,3 Mbps per 10 000 people, a 1 700% difference! Ethopia’s success story The report, however, does highlight one glowing success in Africa – on the first page of the executive summary no less! The co-authors state that “despite being one of the [African] continent’s poorest countries, [Ethopia] is spending nearly one tenth of its GDP on information technology every year”. The country provides examples of how hundreds of government offices and schools now have broadband, “with more to come”. Ethiopia has “committed huge resources to seeing that by 2007 all of its 74m people live no more than a few kilometres from a broadband connection”. At the same time, the authors also draw attention to the progress made in Mozambique. Some would say while nations like Latvia and Croatia have leapfrogged us in the global rating, our position is not that bad. We have seen renewed emphasis on ICT growth and development from both Thabo Mbeki and his deputy. Regulatory hurdles remain, but the new ECA act offers some major pluses. Any bets on where we’ll be ranked next year? Broadband prices set to plummet By J Oker, 1 April 2007 News broken by a Sunday newspaper says that Government will declare the SAT3 landing station an essential facility and further regulate the price of bandwidth on the system. This is set to take place when Telkom’s SAT3 exclusivity expires later this year.   Outbound bandwidth on SAT3 is currently many times more expensive than inbound traffic, mainly due to competition on the inbound portion and Telkom’s monopoly on outbound traffic. “The leg from SA to London is priced at a certain level and that is an agreement Telkom has because of its exclusivity rights. However, if the London to SA circuit is priced at ‘x’, then Telkom charges five times that for the half circuit from SA to London,” said Ajay Pandey, MD of Neotel. This will change with Government’s new policy directives where Telkom and other possible SAT3 bandwidth sellers will be forced to meet the current inbound SAT3 pricing where competition dictates per Mbps rates. Government will further declare the SAT3 landing station an essential facility in terms of Section 43 of the new Electronic Communications Act, which includes the undersea cable. “The days when companies literally held others hostage, because they owned the underlying infrastructure, are slowly becoming history. Like in the gas or oil industries, we are working towards a common open and non-discriminatory access infrastructure framework that is used at cost also in the ICT sector,” said Ivy Matsepe-Casaburri, Minister of Communications. Through VSNL, which is a shareholder in SAT3, Neotel will directly benefit from Government’s move to declare the SAT3 landing station an essential facility. This move by Government will allow them to directly supply bandwidth on SAT 3 to their customers. Neotel said that this is a vital move to level the playing field in the current fixed line telecoms space and further said that they will now be able to offer clients full international SAT3 circuits at a reasonable price. With drastic price drops in international bandwidth, local broadband providers are sure to pass these savings on to consumers in the form of either price cuts or increased usage allowances. Government was quoted as saying that these new policies are a clear indication that they are serious about brining down the price of telecoms services and increase broadband penetration in South Africa. “We are making open and non-discriminatory access to all ICT backbone infrastructure an important aspect of the terms of reference of the Broadband Advisory Council. We are confident that this way, with little cost on the backbone part, operators and other service providers will be able to compete in the provision of services which they can then provide at affordable prices,” Matsepe-Casaburri concluded. More details about the new legislation and the proposed pricing on SAT3 can be found here .