A significant proportion of residents
outside of South Africa’s big cities are in urgent need of becoming familiar
with the Internet so that the opportunity it offers benefits them and the nation’s
Urban centres contain the economic
opportunities, healthcare and services mostly absent from many smaller towns and
This helps explain why two-thirds
of South Africans live in cities.
The ability of new urbanites to work
towards a better life in the city is hamstrung by not being equipped to use services
urban centres have to offer.
To a large degree, this could be remedied by
better and more convenient access to the Internet.
Ironically, the Internet
enables distance working and participation in the digital gig economy, which in
turn, could mitigate urban migration to some degree.
“New sources of work are especially needed
as the youth-to-adult unemployment rate hits historic peaks and average wages
remain significantly lower in emerging economies than in developed economies,”
Professor Mark Graham states in the new report The Risks and Rewards of Online Gig Work At the Global Margins.
But what is preventing rural South Africans
from becoming familiar with the Internet?
Currently about 40% of South African
households have Internet access, and the vast majority use a smartphone to get
As the recent #datamustfall
campaign suggests, mobile data is not only prohibitively expensive by local
standards, but also when compared to international
This leads to what Jonathan Donner calls ‘the
metred mind-set’. Most users of pre-paid mobile data pay a premium for a
set amount, and use it for focused searches. This prevents regular browsing and
the opportunity to become familiar with the Internet.
The result is those who
could benefit most from accessing the wealth of knowledge online, are least
enabled to do so.
Technology may displace some jobs, but on
the whole, generates many more new demands for labour. As Deloitte
research indicates: for every 10 new internet users, “one person gets
lifted out of poverty and one new job gets created”, says Facebook’s
World Bank research show that for each 10% of
national Internet access penetration the GDP increases by 1.34%.
For those who
work online, or who are part of the ‘gig economy’, the production and time
efficiencies that very fast exchange of information enable through Internet
connectivity translate into financial gain. And the rural youth must become key
beneficiaries of this fourth
Just as the industrial revolution used
water and steam to power mechanisation, and as electricity was used to fuel
mass production, now the use of information and communications technologies is
catalysing digital economies across the globe.
But job seekers drawn to the bright city
lights need to be ready and able to compete within the digital economy using
the required ICT skills.
This digital readiness results from the
freedom of burning through at least 1Gb of bandwidth each month, estimates
the Association for Affordable Internet (A4AI).
Of the 50% of South African
households who possess a smartphone, the opportunity of individual family
members to afford frequent use is limited – not least by too-high mobile data
costs. On average 1Gb costs more than 17% of household income across Africa.
The reality is worse for South Africans, as
our official unemployment rate is about 27%, and our society is deeply unequal,
with only 10% of the population owning at least 90%
of all wealth.
The Western Cape Digital Readiness Assessment
reveals that many households spend approximately 27% of their income on ICT
“The high cost of mobile Internet relative to monthly household income
limits the value of the mobile phone as a piece of technology that can bridge
the digital divide,” conclude Luci Abrahams Kiru Pillay in the Right2Know’s The Lived Costs of Communication
in the connectivity value chain
The Internet supply chain has many links,
often increasing further from urban centres, with few access providers owning
the entire connection journey from device to international internet.
recent report from Caribu Digital, a digital economy consultancy, explains,
“the Internet has always been built on complex ‘peering’ arrangements with
different tiers of service providers and inter-connection agreements to link
various networks and services.”
“Depending on what layer of connectivity
the service in question provides, it will rely on providers above or below to
complete the connection, and thus its service will be restricted by the availability
and scope of agreements it can arrange with the other layers. For example,
services providing ‘last-mile’ connectivity will rely on backhaul and/or ‘middle-mile’
pipes from other providers, resulting in dependencies on pricing and
performance availability. Similarly, some backhaul providers [connecting the
Internet Service Provider (ISP) to the international Internet], such as
satellite services, will depend on local providers to connect users and manage
the customer relationship, restricting the backhaul provider’s reach to only
those areas (or customer segments) for which the local providers have
established last-mile service. Therefore, a service provider’s ability to scale
is likely to be constrained by the available complementary providers it will
have to partner with to offer full end-to-end connectivity to users.”
The links in the Internet access value
chain often increase the further the town or area is from an urban centre.
large proportion of this value chain is the backhaul, Steve Song pointed out
during the NGON Africa conference.
drops backhaul pricing
Previously Telkom’s domination of backhaul
infrastructure enabled them to keep costs high to protect their monopolies in
the local markets by supressing competition, explained Johan Kruger, CEO of Potchefstroom
ISP Safricom Telecoms.
“This resulted in the mobile operators and other larger
ISP to build national backhaul as Telkom’s aging and unreliable network was too
These new players were able to build better and cheaper networks to
provide their own backhaul. Besides forcing Telkom to drop their price, it
invigorated the market allowing more local ISPs to buy connectivity and sell
access at reasonable prices. Competition solved the problem.
“Today Safaricom pays R180 for each megabyte
per second in backhaul capacity. Four years ago we paid about R1000 for the
same. While we are able to buy increasing amounts of bandwidth at wholesale
pricing, and terrestrial and International bandwidth pricing continues to sink,
our better pricing mostly results from there being several fibre cables going
In South Africa, Dark Fibre Africa (DFA)
have direct access to two major undersea cables and customers can buy absolute
dark fibre or a managed network service, Reshaad Sha, DFA Chief Strategy
Officer commented in an interview with me.
“More than 100 ISPs use DFA so we
feel that we have the price point right,” he said.
National government has tried to improve
efficiencies in the telecommunications sector with the introduction of a
state-owned enterprise focusing on increasing the market’s access to backhaul,
namely Broadband Infraco (BBI).
BBI is currently in discussions to purchase an
Individual Electronic Communications (I-ECS) license and so also sell capacity
directly to small Internet service providers.
This will further stimulate the
growth of unlicensed SMMEs outside of urban centres, the firm said in response
to my questions.
Market forces have encouraged BBI to become
a better, more competitive partner, notes Kruger.
Backhaul, he says, is no
longer the main barrier to access, but rather the pricing of the ‘last mile’,
the final stage of connectivity – between your phone and the ISP.
To assist in last mile access in the
Western Cape, the provincial government ensured that when contracting Neotel to
build and operate a fibre roll-out throughout the province that at least one
provincial building in each ward would be connected, no matter how remote.
The high proportion of fibre used in this
network ensured the stability and capacity to transmit high volumes of bandwidth
at a fraction of previous pricing options.
Besides Neotel being able to offer
more stable backhaul to the provincial government as a result, they also offer
public Internet access via Wi-Fi broadcast off provincial buildings.
of this public Wi-Fi project was to ensure affordable Internet access across
Any user at an active “NeoHotspot” is able to access 250Mb per
month and buy more access starting from R5 for a day (limited to 700Mb) to R45
for a month (limited to 5Gb).
Part of the idea is increase the opportunity for
local ISPs to buy connectivity and sell access, using Neotel’s fibre network.
what happens after access?
For local communities to benefit from
having a NeoHotspot, Cape
Digital Foundation (CDF) has been created to ensure that public access,
especially in those rural settings, translates into digital literacy and the
ability to use the Internet productively.
ability to use mobile devices] has huge socio-economic, educational,
commercial, societal and individual significance. Emerging economies have been
hugely resourceful in using mobility in socio-economically important ways, to
empower micro enterprises,” says newly-appointed Cape Digital Foundation
Executive Director Emma Kaye.
digital economic transformation
A radical digital economic transformation
will take place when it is easier for South Africa’s small town residents to
get online, and make money doing so.
Cameron is a Senior Project Manager at Cape Town Partnership, he will be
attending the Dynamic Spectrum Alliance global summit during 9 – 11 May 2017 to
join in a global, cross-industry conversation focused on increasing dynamic
access to unused radio frequencies – which can make rural Internet access much
easier. Follow him on Twitter
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