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Bridging the divide

Nov 09 2010 10:23 Simon Dingle

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TALKING about the "digital divide" in South Africa has become clichéd. It's a term we've heard for over a decade and represents a situation that continues to challenge socioeconomic progress.

However, solving the problem of digital have-nots is not only good from a moral point of view, but also makes sound business sense. And for the first time we are seeing the needed pieces of the puzzle coming together.

I won't bore you with another explanation of how broadband internet penetration is hinged to economic growth - it's a plain fact that has been demonstrated the world over.

Suffice it to say that bridging the digital divide between connected South Africans and those that do not have the luxury of being online would bolster education, empower small businesses, extend government services and enable a whole new dimension of growth for our country.

But for companies like MTN and Vodacom, as just two obvious examples, the growth prospects in terms of selling data services are massive.

According to the World Bank, there were just under 4.2 million internet-connected South Africans in 2008. Given the growth rate since 1991, it would be fair to put the current figure at somewhere around 5.5 million.

That means about 45 million people in South Africa have no connectivity - a massive potential market and one that is of growing concern for global companies looking to unlock growth in the developing world.

The irony here is that when it comes to cellphones, South Africa is one of the most densely covered markets. Our mobile penetration rate is over 100%, which means that there are more cellphones than people in SA. Part of this is thanks to the prepaid cellular - a South African invention that made it possible for anyone to afford a phone.

With most of the population covered by cellular networks and initiatives under way to use this infrastructure to deliver internet services even to the most remote rural areas, the divide - at least in terms of connectivity - is set for bridging.

The true challenge lies in getting affordable internet-capable devices to market. And this is another area where real progress is finally being made.

I recently discussed the subject with the managing director of World Wide Worx, Arthur Goldstuck, who points out that the tablet computer market, sparked by Apple's iPad, holds immense promise for emerging markets.

Tablet computers are cheap and getting cheaper. They offer intuitive touch interfaces that can be used without even knowing how to read and offer real opportunities in education.

Cell C CEO Lars Reichelt is eyeing the tablet computing industry with much glee as his company works to extend its new data network to cover 97% of SA's population, a goal he says they will reach by the end of 2011.

He agrees with Goldstuck that iPad-like devices are becoming increasingly affordable and accessible. He adds that they could be used for delivering content like textbooks - which are ridiculously expensive, as any parent of a university student will attest to - at a fraction of the price.

Goldstuck's prediction is that by this time next year we will have tablet computers that cost half of what they do now, enabled by mass manufacturing economies of scale and free operating systems like Google's Android.

Put that together with free content initiatives like TextbookRevolution - an online service that provides free educational resources - and we're set to see the divide bridged in a very convincing way.

But it will require political will and business interest for the final push to a digital citizenry.

Our politicians are talking the talk and have been for a long time. The ANC regime realises that service delivery is key to keeping it in power, and that the internet offers massive opportunities in that regard.

And business sees the growth. Vodacom reported interim results this week showing a 41% growth in data usage on its network - and that is just the beginning.

The company already has initiatives to bring cheaper laptops and other connected devices to market, and is the country's biggest reseller of laptop computers via bundled contracts - an interesting stat provided by Goldstuck.

That the other 45 million South Africans are coming online is a given. What is your business planning for them when they arrive?

 - Fin24
internet
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