A new Internet survey has found that the number of South Africans dialing in to the Internet is at least 50% higher than most estimates have revealed until now. The survey, undertaken by Internet specialists Arthur Goldstuck and Cathy Stadler, is the first independent survey to enjoy the cooperation of all major Internet Service Providers in South Africa.
"Our most important finding is the unexpected strength of the Internet industry, which can only be reinforced by today`s ruling by the SA Telecommunications Regulatory Authority (SATRA) that Telkom cannot have exclusive rights to Internet connections in South Africa," says Arthur Goldstuck, author of The Hitchhiker`s Guide to the Internet. "SATRA`s decision means that the industry can speed up the dramatic growth path on which it had been for the past two years. We found that, on average, ISPs were growing their customer base by 10% a month, pointing to a doubling in size over a year."
Stadler adds: "The survey itself was a major breakthrough, since all attempts to get a market total have until now failed due to ISPs unwillingness to provide figures to competitors. Both this openness and the totals themselves signal a maturing of the Internet services market in South Africa." The 1997 South African Internet Services Industry Survey divides the Internet market into three categories: dial-up users accessing the Internet via modems, corporate users gaining access through company networks, and academic users gaining access at schools and tertiary educational institutions.
The total number of South Africans gaining access through dial-up modems via Internet Service Providers is 154 276. Previous estimates, usually based on the totals claimed only by the largest service providers, put this figure at 100 000. The survey reveals that the market is not completely dominated by the "big two" service providers, UUNet Internet Africa and Internet Solution. A third ISP, Global Internet Access, has edged up to join the giants in Internet service providers with more than 15000 users, while a further four service providers boast between 5000 and 15000 users.
In the medium-sized market, serving from 1000 to 5000 customers, no less then seven ISPs have emerged, while a similar number in the small-medium market serve between 500 and 1000 dial-up customers. More than half of the 80-plus ISPs in South Africa have less than 500 dial-up customers, and these are likely to face a struggle for survival.
However, the fact that more than 20 ISPs have established a strong customer base - each with more than a 1000 dial-up subscribers - over the past three years contradicts the long-held belief that only the large providers could survive. Further, the survey shows that Telkom`s much-maligned SAIX has made a valuable contribution to the diversity of the Internet industry, adding 20 000 subscribers to the dial-up market, and enabling numerous small service providers to address previously uneconomical niches.
The number of South Africans gaining access to the Internet through corporate networks - linked to the Internet via high-speed digital leased lines - also appears to be higher than previously estimated. The research showed that, excluding Telkom`s SAIX and one of the major ISPs, which would not divulge leased line figures, more than 2000 leased lines have been installed for companies and corporations in South Africa. A conservative estimate suggests that, on average, each leased line provides access to a hundred users, giving a total of 200 000 corporate users.
Since SAIX is one of the largest networking service providers in the country, their client-base could well double this figure. The total figure is significantly boosted by the number of users using the Internet through the universities network, Uninet, which provides access to most tertiary educational institutions in southern Africa, as well as to more than 200 schools. While the total student population it serves - and therefore potentially has access to the Internet - is well over 500 000, the accepted minimum for students actually using this access is 100 000.
This provides a minimum of approximately 450 000 Internet users in South Africa. Since this total excludes the leased line access provided by SAIX and one of the major ISPs, the exact figure is likely to be more than 600 000. "The most significant findings of our research were the size of the dial-up market, which clearly makes Internet users a far more important target market than previously realised. The implications for electronic commerce are enormous," say Goldstuck and Stadler.
"Just as important, however, are our findings on the healthy state of the Internet services industry. The existence of so many medium to large independent operators attests to the positive impact of open competition in the Internet industry. The big do keep getting bigger, but there is clearly always room for new players.
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