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SA ICT leads region but global rank falls

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South Africa has seen a drop in its global ranking for information and communications technology, despite being described as being at the forefront of the region.

South Africa has dropped from 88th place in global ICT development index (IDI) to 92, according to the ninth edition of the annual Measuring the Information Society Report. The report was released this week by the International Telecommunication Union (ITU) – the United Nations Specialized agency for information and communication technology (ICT).

This is despite the fact that the report states that South Africa is at the forefront of the region’s technological development with the latest broadband technologies and wide coverage.

“This has been enabled by a suitable regulatory framework and a competitive private sector-driven market,” says the ITU. “Cost remains an issue due to significant duplication in backbone networks, with a need to move to a cost-based open access regime.”

However, South Africa lags behind Mauritius (72) and Seychelles (90) in the IDI rankings.

Globally, says the ITU,  concurrent advances in the Internet of Things, big data analytics, cloud computing and artificial intelligence will enable tremendous innovations and fundamentally transform business, government and society – ultimately serving to improve livelihoods around the globe.

“This revolution will unfold,” the report states, “over the coming decades with opportunities, challenges, and implications that are not yet fully known. To harness these benefits, countries will need to create conditions supportive to the deployment of next-generation network and service infrastructures. They will also have to adopt policies that are conducive to experimentation and innovation, while mitigating potential risks to information security, privacy, and employment.”

“This year’s report shows that ICTs have the potential to make the world a better place and contribute immensely to the attainment of the Sustainable Development Goals,” said ITU Secretary-General Houlin Zhao. “However, despite the overall progress achieved, the digital divide remains a challenge which needs to be addressed. This is important because information and communication technology and the digital economy have the potential to transform the lives of billions of men, women and children. The digital revolution can transform nations — entire continents – but only if digital resources are accessible. This report will help to support countries to do just that.”

“It is my hope that this report will be of great value to the ITU membership, particularly for  policy-makers, the ICT industry and others working towards the building of an inclusive global information society,” said Brahima Sanou, Director of ITU’s Telecommunication Development Bureau, which produces the report each year. “Fully harnessing the economic and social benefits of the digital revolution requires efficient and affordable physical infrastructures and services, more advanced user skills, and internationally comparable benchmarks and indicators to support enabling public policies.”

SUMMARY OF REPORT FINDINGS:

ICT development index – country ranking

The ITU ICT Development Index 2017 (IDI 2017) featured in the MIS report is a unique benchmark of the level of ICT development in countries across the world. Iceland tops the IDI 2017 rankings. It is followed by two countries and one economy in the Asia and the Pacific region, and six other countries in Europe, which have competitive ICT markets that have experienced high levels of ICT investment and innovation over many years.

The IDI has up to now been based on 11 indicators. However, recent developments in ICT markets have led to the review of those indicators. As a result of that review, in 2018 the index will be defined by 14 indicators that should add further insights into the performance of individual countries and the relative performance of countries at different development levels.

Measuring ICT development

The latest data on ICT development show continued progress in connectivity and use of ICTs. There has been sustained growth in the availability of communications in the past decade, led by growth in mobile cellular telephony and, more recently, in mobile-broadband. Growth in fixed and mobile-broadband infrastructure has stimulated Internet access and use. The number of mobile-broadband subscriptions worldwide now exceeds 50 per 100 population, enabling improved access to the Internet and online services.

In spite of the rapid expansion of ICTs, there are substantial digital divides between countries and regions. However, there has been registered progress in ICT growth by least developed countries, in terms of connectivity as well as the use of the Internet. Globally, more than half of households worldwide now have access to the Internet, though the rate of growth appears to have fallen below 5 per cent a year. There has also been significant progress in terms of bridging the gender digital divide across the regions.

Emerging ICT trends

The Internet of Things will greatly expand the digital footprint. In addition to connecting people, organizations and information resources, it will also connect objects equipped with digital information and with sensing, processing and communication capabilities. This ubiquitous infrastructure will generate abundant data that can be utilized to achieve efficiency gains in the production and distribution of goods and services, and to improve human life in innovative ways.

Big data analytics will extract useful knowledge from this flow of digital information. It will drive better understanding and predictions of ICT developments, as well as improved management and policy decisions. Making sense of proliferating information requires a workforce with appropriate analytical, computational, methodological skills and a high-capacity ICT infrastructure.

Cloud and other architectures will likely lower the entry barriers to scalable computing resources. They are starting to deliver flexible and on-demand computational services over the Internet, lowering the fixed-cost of ICT infrastructure, to the benefit of small- and medium-sized organizations. Realizing their full potential will depend on the availability of reliable fixed and mobile broadband connectivity.

Artificial intelligence will aid humans to make better decisions. In order to achieve this goal, each algorithm needs to be tailored carefully to existing data and the objectives pursued. This requires considerable human expertise in machine learning and large datasets to train algorithms.

All of these advanced ICTs contribute to realizing the critically important United Nations Sustainable Development Goals (SGDs). Promising applications already exist in areas such as manufacturing, precision agriculture, government, education, health care, smart cities and smart transportation. As part of broader initiatives, ICTs can contribute to achieving  each of the 17 SDGs.

Harnessing the benefits of advanced ICTs requires appropriate infrastructures, services and skills. Networks will have to support diverse quality-of-service demands from applications and users while delivering robust and ubiquitous connectivity. This will require the roll-out of wireless Internet of Things platforms, and relying on network virtualization and improved fiber connectivity. Moreover, it will require the development of advanced ICT skills among users.

Advanced ICTs raise important concerns over next-generation digital divides. Network operators and users will have to adapt their business models to take advantage of the opportunities of the digital transformation. Thus, policy makers and regulators are called upon to create conditions facilitating entrepreneurial experiments and innovation.

Policy will also have to mitigate challenges to information security, privacy, employment and income inequality. Specific local and national needs also need to be taken into account. In many parts of the digital economy, low entry barriers can empower local entrepreneurs to develop innovative business models adapted to local conditions. It will be important to facilitate the development of culturally sensitive human-centered algorithms and applications.

Reliable and meaningful measurements of the deployment and use of advanced ICTs are critical. Fully harnessing the potential benefits of this progress requires reliable and meaningful metrics that go beyond existing data. This will require strong efforts of collaboration among various stakeholders and the development of new approaches to harvest information directly from digital infrastructures and applications.

Regional comparisons

There are considerable differences between geographic regions in the levels of ICT development as demonstrated by the IDI 2017. There is also significant variation in the experience of individual countries within each region – with these differences mainly associated with levels of economic development.

The average value for Africa in the IDI 2017 is 2.64 points. Mauritius, ranks in the upper half of the global IDI distribution. The region includes two of the three countries, which achieved the most dynamic improvements in their IDI value over the year – Namibia and Gabon.

The United States and Canada top the IDI 2017 ranking in the Americas region. The majority of countries in the region fall within the two middle quartiles. The most significant improvements in the Americas region were recorded by middle-ranking countries in South and Central America and the Caribbean.

The Arab States region is also very diverse in terms of IDI 2017 performance. This region includes a number of, high-income economies, including three countries Bahrain, Qatar and United Arab Emirates. The strongest improvements in this region were seen in middle-income countries, whose average value rose by more than twice that of countries at the top and bottom of the regional distribution.

Seven economies in the Asia and the Pacific region have IDI 2017 values above 7.50 points and rank within the highest quartile, including the Republic of Korea which is ranked second overall. Six countries improved their IDI values by more than 0.40 points, led by the second most dynamic country in IDI 2017, the Islamic Republic of Iran.

In the Commonwealth of Independent States (CIS), only one country in the region, Belarus, is in the top quartile of the IDI 2017 ranking. The most dynamic countries in terms of IDI value were those at the bottom of the regional rankings – Ukraine, Uzbekistan and Kyrgyzstan.

Europe has the highest average IDI 2017 value among world regions (7.50 points). As many as 28 of its 40 countries rank within the highest quartile. The most substantial improvements in value were recorded by Cyprus and Turkey.

Country profiles

This year’s report features – for the first time – country profiles highlighting the ICT market structure and the latest developments in 192 economies worldwide. Each profile includes an overview of the policy and regulatory initiatives undertaken as well as the current status of network roll-out and service uptake. These profiles are presented in Volume II of this year’s report.

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Online retail gets real

After decades of experience in selling online, retailers still seek out the secret of reaching the digital consumer, writes ARTHUR GOLDSTUCK.

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It’s been 23 years since the first pizza and the first bunch of flowers was sold online. One would think, after all this time, that retailers would know exactly what works, and exactly how the digital consumer thinks.

Yet, in shopping-mad South Africa, only 4% of adults regularly shop online. One could blame high data costs, low levels of tech-savviness, or lack of trust. However, that doesn’t explain why a population where more than a quarter of people have a debit or credit card and almost 40% of people use the Internet is staying away.

The new Online Retail in South Africa 2019 study, conducted by World Wide Worx with the support of Visa and Platinum Seed, reveals that growth is in fact healthy, but is still coming off a low base. This year, the total sale of retail products online is expected to pass the R14-billion mark, making up 1.4% of total retail.

This figure represents 25% growth over 2017, and comes after the same rate of growth was seen in 2017. At this rate, it is clear that online retail is going mainstream, driven by aggressive marketing, and new shopping channels like mobile shopping. 

But it is equally clear that not all retailers are getting it right. According to the study, the unwillingness of business to reinvest revenue in developing their online presence is one of the main barriers to long-term success. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.

On the surface, the industry looks healthy, as a surprisingly high 71% of online retailers surveyed say they are profitable. But this brings to mind the early days of Amazon.com, in 1996, when founder Jeff Bezos was asked when it would become profitable.

He declared that it would not be profitable for at least another five years. And if it did, he said, it would be in big trouble. He meant that it was so important for long-term sustainability that Amazon reinvest all its revenues in customer systems, that it could not afford to look for short-term profits.

According to the South African study, the single most critical factor in the success of online retail activities is customer service. A vast majority, 98% of respondents, regarded it as important. This positions customer service as the very heart of online retail. For Amazon, investment back into systems that would streamline customer service became the key to the world’s digital wallets.

In South Africa online still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature. 

Clothing and apparel is the fastest growing sector, but is also the sector with the highest turnover of businesses. It illustrates the dangers of a low barrier to entry: the survival rate of online stores in this sector is probably directly opposite to the ease of setting up an online apparel store.

A fast-growing category that was fairly low on the agenda in the past, alcohol, tobacco and vaping, has benefited from the increased online supply of vapes, juices and accessories. It also suggests that smoking bans, and the change in the legal status of marijuana during the survey, may have boosted demand. 

In the coming weeks, we can expect online retail to fall under the spotlight as never before. Black Friday, a shopping tradition imported “wholesale” from the United States, is expected to become the biggest online shopping day of the year in South Africa, as it is in the USA.

Initially, it was just a gimmick in South Africa, attempting to cash in on what was a purely American tradition of insane sales on the Friday after Thanksgiving Day, which occurs on the third Thursday of November every year. It is followed by Cyber Monday, making the entire weekend one of major promotions and great bargains.

It has grown every year in South Africa since its first introduction about six years ago, and last year it broke into the mainstream, with numerous high profile retailers embracing it, and many consumers experiencing it for the first time. 

It is now positioned as the prime bargain day of the year for consumers, and many wait in anticipation for it, as they do in the USA. Along with Cyber Monday, it provides an excuse for retailers to go all out in their marketing, and for consumers to storm the display shelves or web pages. South African shoppers, clearly, are easily enticed by bargains.

Word of mouth around Black Friday has also grown massively in the past two years, driven by both media and shoppers who have found ridiculous bargains. As news spreads that the most ridiculous of the bargains are to be had online, even those who were reticent of digital shopping will be tempted to convert.

The Online Retail in SA 2019 report has shown over the years that, as people become more experienced in using the Internet, their propensity to shop online increases. This is part of the World Wide Worx model known as the Digital Participation Curve. The key missing factor in the Curve is that most retailers do not know how to convert that propensity into actual online shopping behaviour. Black Friday will be one of the keys to conversion.

Carry on reading to find out about the online retailers of the year.

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Reliable satellite Internet?

MzansiSat, a satellite-Internet business, aims to beam Internet connections to places in South Africa which don’t have access to cabled and mobile network infrastructure, writes BRYAN TURNER.

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Stellenbosch-based MzansiSat promises to provide cheap wholesale Internet to Internet Service Providers for as little as R25 per Gigabyte. Providers who offer more expensive Internet services could benefit greatly from partnering with MzansiSat, says the company. 

“Using MzansiSat, we hope that we can carry over cost-savings benefits to the consumer,” says Victor Stephanopoli, MzansiSat chief operating officer.

The company, which has been spun off from StellSat, has been looking to increase its investor portfolio while it waits for spectrum approval. The additional investment will allow MzansiSat’s satellite to operate in more regions across Africa.

The MzansiSat satellite is being built by Thales Alenia Space, a French company which is also acting as technical partner to MzansiSat. In addition to building the satellite, Thales Alenia Space will also be assisting MzansiSat in coordinating the launch. The company intends to launch the satellite into the 56°E orbital slot in a geostationary orbit, which enables communication almost anywhere in Africa. The launch is expected to happen in 2022. 

The satellite will have 76 transponders, 48 of which will be Ku-band and 28 C-band. Ku-band is all about high-speed performance, while C-band deals with weather-resistance. The design intention is for customers of MzansiSat to choose between very cheap, reliable data and very fast, power-efficient data. 

C-band is an older technology, which makes bandwidth cheaper and almost never affected by rain but requires bigger dishes and slower bandwidth compared to Ku-band connections. On the other hand, Ku-band is faster, experiences less microwave interference, and requires less power to run – but is less reliable with bad weather conditions.

MzansiSat’s potential military applications are significant, due to the nature of the military being mobile and possibly in remote areas without connectivity.  Connectivity everywhere would be potentially be life-saving.

Consumers in remote areas will benefit, even though satellite is higher in latency than fibre and LTE connections. While this level of latency is high (a fifth of a second in theory), satellite connections are still adequate for browsing the Internet and watching online content. 

The Internet of Things (IoT) may see the benefits of satellite Internet before consumers do. The applications of IoT in agriculture are vast, from hydration sensors to soil nutrient testers, and can be realised with an Internet connection which is available in a remote area.

Stephanopoli says that e-learning in remote areas can also benefit from MzansiSat’s presence, as many school resources are becoming readily available online. 

“Through our network, the learning experience can be beamed into classrooms across the country to substitute or complement local resources within the South African schooling system.”

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