Broadband revolution on track

By Damaria Senne, ITWeb senior journalist

Johannesburg, 18 Jun 2007

South Africa has seen strong broadband adoption this year, putting it on track for a broadband revolution that could result in three million broadband subscribers by 2010, says BMI-TechKnowledge.

This follows reports of strong broadband performance by Vodacom and Telkom, as well as price cuts from the fixed-line operator.

Last week Vodacom reported a 3G HSDPA subscriber base of 139 000, as well as more than 899 000 Vodafone live! users. This translates to 64% growth in data revenue over the past year, the company said.

"We knew it would do well, but the uptake has been far better than we expected," says Vodacom CEO Alan Knott-Craig.

Telkom also reported substantial broadband growth year-on-year. The fixed-line operator says it saw 78.1% ADSL growth, from 143 509 to 255 633 subscribers.

iBurst recently reported it has over 40 000 subscribers, bringing it closer to its 70 000 subscriber year-end target.

MTN said it does not report on its 3G/HSDPA figures individually.

Sentech was unable to respond by the time of publication.

More competition

MyADSL founder Rudolph Muller says mobile providers, Vodacom in particular, are doing very well in the broadband growth department and are likely to continue doing so.

Wireless providers find themselves in a competitive environment, forcing them to announce drastic price cuts earlier this year, he explains.

These providers also have fairly good customer support, allowing for quick installation and activation times, he says.

Price cuts

BMI-TechKnowledge senior analyst Richard Hurst says SA will need an increased roll-out of ADSL services to see greater penetration, in order to reach the three million subscriber target. Telkom will have to continue to invest in its network and in particular fibre to shorten the distances between subscribers and the local exchanges, he says.

Telkom will also have to drastically reduce ADSL prices to bring SA in line with international standards, says Muller.

Last week, the fixed-line operator announced an overall price decrease of 1.2%. Acting CEO Reuben September said the proposed price cuts would provide more savings for existing customers and attract new entrants to the broadband experience.

"While the net impact of the proposed prices will vary among customers, the overall effect will be a reduction in the cost of telecommunications in SA," he said.

Transmission still costly

Communications Users Association of SA spokesman Ray Webber says while broadband access has grown significantly due to the performance of mobile broadband providers, actual throughput is still slow.

Actual download speeds are coming in at around 100Kbps or less, he notes. This is because basic transmission costs are still extremely expensive, he comments.

Until the price of national and international bandwidth is significantly reduced, broadband growth in SA will always be restricted, he says.