Internet for 22m by 2020?
Government plans to extend broadband access into muchneglected rural areas
The insatiable appetite for broadband Internet continues to spur spending in telecommunications infrastructure — mobile and fixed-line — with companies already committing to further investments in 2017.
The availability of reliable broadband networks has led to smart phone sales and usage soaring, resulting in a surge in data usage. The availability of fast Internet has also opened up new industries such as mobile app developments and given rise to new online services such as online banking, video and music streaming. Other technology services such as the Internet of Things and cloud computing also require reliable connection to the Internet.
According to telecommunications and postal services minister Siyabonga Cwele, total investments towards information and communication technology (ICT) increased by 18.8% to R28bn in 2016 — despite the tough economic environment.
A recent report by the Independent Communications Authority of SA (Icasa) showed that 3G coverage has reached 99% and 4G 75% of the total SA population.
However, not all those who are “covered” have access to or are using the Internet, as only 53.4% of SA households have access to the Internet. This year’s investments are expected to exceed the 2016 levels as more companies like Neotel, Vox, as well as national, provincial and local government plan to accelerate fibre-optic and wireless network rollouts.
Though companies have been investing heavily in telecoms infrastructure, the bulk of the investments have focused on urban areas. The department has set aside R1.9bn for the first phase of its broadband infrastructure programme under the SA Connect Policy. It has prioritised underserviced areas, focusing on schools, health facilities and other government institutions.
Cwele says government needs to connect 22m people to meet the SA Connect and National Development Plan target of universal access to high-speed Internet by the end of 2020. Government is enlisting the help of state-owned entities to roll out the first phase of its broadband network infrastructure, mainly in rural areas.
There has been an increase in companies entering the fibre infrastructure space. Infrastructure sharing and open-access network provided by companies such as Dark Fibre Africa have lowered barriers to entry for some companies. Dark Fibre Africa has built an open-access network and sells capacity to any company that wants to provide data packages.
One of the companies that has ramped up investment in telecommunications infrastructure is Vox, which will spend about R500m in 2017. Vox CEO Jacques du Toit says the company will deploy its own fibre in some areas and lease capacity from other companies that already have similar infrastructure in other areas.
It is not targeting areas prone to duplication. Du Toit says Vox has secured 86,000 fibre-to-the-home and more than 10,000 fibre-tothe-business opportunities.
Vodacom is looking at a joint venture for its fibre infrastructure rollout. It has so far connected more than 21,000 homes and businesses with fibre. It wants to accelerate its rollout as it aims for 1m fibre connections.
Telkom wants to connect fibre networks to 1m households by 2018. At the end of September 2016, it had connected fibre to 144,512 homes and 850 gated communities. It had 42,176 fibre connections to business premises.
Telkom has led the pack in fixed-line network, by virtue of having previously been the only company providing telephone services. But the company is facing competition not only from mobile network operators but from new entrants in the market.
The investment in telecommunications network infrastructure is set to increase with the allocation of spectrum to companies to enable the rollout of the super-fast 4G network. As part of the ICT White Paper Policy, government has proposed the establishment of a wireless open-access network (Woan), which is aimed at stimulating competition and removing barriers to entry for new entrants, especially black entrepreneurs and small to medium enterprises.
The wireless open access network company will be allocated the lucrative spectrum that will be partly leased to other companies including mobile network operators. Cwele says given the current levels of investment on the 4G network, the department will conduct an urgent high-level study to determine if Woan will utilise all high-demand spectrum for the 4G network. The remaining spectrum will be licensed to operators with rural coverage obligations.
Anesu Charamba, programme manager for the Digital Transformation Practice at Frost & Sullivan, says the move by the ministry is expected to allay any fears of a significant drop in operators’ infrastructure investment.