The broadband war has begun

The broadband war has begun, with the rate of Internet adoption growing at 30% to 40% a month, says Mike Brierley, CEO of MTN Network Solutions. Brierley was speaking at ITWeb`s 2006 Mobile and Wireless conference in Bryanston this morning.

The major competition is between Telkom and mobile phone providers, with Telkom approaching the 200 000 subscriber mark and the two major mobile providers registering more than 250 000 combined subscribers, he said.

Despite having extensive infrastructure, Sentech has less than 10 000 subscribers, while iBurst, has just under 30 000 subscribers, Brierley added.

Competition within the broadband arena is likely to hot up, as city municipalities also enter the market to provide broadband services at local level. Brierley cited several cities, such as Johannesburg, Cape Town, Tshwane and Ekurhuleni, whose plans to provide broadband services and bridge the digital divide are at an advanced stage.

He said that under-serviced area licensees may also grow to become competing forces at local level. While they have no money, they will be allocated spectrum and their licence provisions are not restrictive within their geographic areas.

Another area of competition is between wireless technology, Brierley said. While mobile is king, the differences between the various technologies are not major, he said. Wireless technology has the same fundamental limitations, he said. As a result, there is unlikely to be a clear winner, with the technologies more likely to co-habit within the marketplace.

Brierley noted that, while government aims to encourage competition within the broadband space, providers are not treated equally when it comes to spectrum allocation. Telkom and Sentech have been allocated spectrum more generously than others, without the "use it or lose it" safeguards or payment requirements.

The mobile phone providers have also been allocated spectrum (excluding WiMax), he said. However, they have to pay an annual fee of R5 million, a R100 000 per MHz, as well as fulfilling social responsibility requirements.

The result of this disparity in spectrum allocation is that Telkom has a lot of spectrum that it is not using. If cyber-squatters were required to pay for their spectrum allocation, they would have a greater incentive to use it or to sell it, Brierley noted.