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It’s 1994 all over again

Growth in Internet access in South Africa will receive a kick-start in 2004 after a dramatic slowdown in the past three years. This is the key finding of the latest edition of World Wide Worx’s annual study of the South African Internet access industry By ARTHUR GOLDSTUCK reports on his research.

South Africans who’ve been watching the Internet industry for the past decade would be forgiven for thinking it feels like 1994 all over again.

Suddenly, there are so many choices for getting onto the Internet, we don’t know where to start. Do you remember going on to the World Wide Web for the first time and not knowing which Web site to visit first, or how to find your way through the forest of choices?

It’s beginning to get that way again, except that this way it is the range of choices for broadband, or high-speed, access. Telkom, for all the obstacles they have placed in the way of the industry, kicked off the broadband era for ordinary South Africans with the roll-out of ADSL a year ago.

The problem was a little like the theme of the song by The Waterboys, ‚Whole of the Moon‚ , with the line, ‚I saw the crescent, you saw the whole of the moon‚ . While ADSL offered so much, we were only offered a slice of the real thing. The service had a download cap, meaning that once a user reached a limit, access was slowed down to less than a crawl. And the upload speed was limited to half the download speed ‚ despite the fact that there was little justification for such an arbitrary decision.

Now we have an alternative: wireless broadband from Sentech. For a similar monthly cost and similar speeds, but with no cap, no halving of upload speeds, with the modem included in the subscription and no installation cost (two of the upfront costs for ADSL), you will be able to carry your modem in your pocket and connect from anywhere that has reception.

Sentech’s service is one of a number of factors that led to the conclusion that growth in Internet access in South Africa will receive a kick-start in 2004 after a dramatic slowdown in the past three years.

This is the key finding of the latest edition of World Wide Worx’s annual study of the South African Internet access industry.

According to ‚The Goldstuck Report: Internet Access in South Africa 2004‚ , 3,1-million South Africans had access to the Internet at the end of 2002. Growth in 2002 was around 7%, the slowest since the Internet became available to the public in 1993, and the first time it had been below 20%.

Growth in 2003 was set to be only 6%, with 3.28 million South Africans expected to have access to the Internet by the end of 2003. This is a mere 1 in every 13 South Africans, marginally up from 1 in 15 at the end of 2001.

World Wide Worx conducted the research in collaboration with IT outsourcing organisation netsurit and ISP value-added applications provider Systemsfusion. Three developments are expected to boost growth in 2004, namely: * The roll-out of competitive access services to businesses by the Second Network Operator (SNO), which has finally been granted a licence to operate: * The roll-out of high-speed or broadband wireless access by Sentech, which is characterised in the report as the HNO, or Half Network Operator, due to its wide ranging license to provide access services: * The healthy rand-dollar exchange rate, which has dramatically brought down the cost of equipment for rolling out infrastructure.

From having no choice at all, the South African market will suddenly be faced with two new players who are both eager to supply Internet access needs.

Among the most significant findings were:

* The size of the dial-up market passed the one-million mark for the first time in 2002, largely due to the marketing campaigns of Telkom and Absa’s Internet services, while the subscriber base of traditional ISPs fell for the first time: * ISPs tended to be more focused on serving existing customers than on chasing growth in users, and this in turn resulted in the most profitable year yet for the access industry, despite the slowdown in user growth: * The leased line market for corporate access remained healthy, largely thanks to companies focusing on the reliability of their networks and putting more backup systems in place. As a result, the number of lines grew faster than expected, but growth in users with access to such lines was slower than expected. * Schools connectivity will receive a boost in 2004 as a range of long-awaited projects are finally implemented.

For the first time, the annual survey included a survey of small, medium and micro enterprise (SMME) usage of the Internet, which saw research partner Netsurit surveying more than 2200 SMMEs with Internet access. Almost half reported e-mail as their primary use of the Internet, while a third cited banking as their primary online activity.

The survey also found that small businesses with Internet connections were increasingly pursuing high-speed connectivity, with only one out of five using traditional dial-up modem access.

Future versions of the survey will extend this research to corporates and consumers.

On the technology front, the report concludes that 2004 will see the biggest explosion of technology options yet available to Internet users in South Africa

Nevo Hadas, VP of marketing for the survey’s support partners Systemsfusion, warns that this poses a huge challenge to ISPs. ‚They have to make their offerings not only simple to use, but also simple to understand,‚ he says. ‚The Internet user wants a fast, reliable connection, rather than a technically brilliant way for it reach the computer. The industry has to be technically brilliant in such a way that the user doesn’t even know about it.‚

* Arthur Goldstuck is editor of The Big Change and MD of Word Wide Worx. He can be contacted on, or by telephone on 011 782 7003. Visit the World Wide Worx web site at http://www.theworx.bix

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