Everything you need to know about internet in South Africa (Literally)

 

Internet in South Africa:

When Kimberly became the first city in the Southern Hemisphere and in Africa to get electric street lights on Sept. 1, 1882, South Africa gained a first of many firsts in its technological-advancement history. It would go on to contribute such inventions as the first automated pool cleaner, the Kreepy Krauly, which was introduced to the world by South African inventor Ferdinand Chauvier in 1974. Many other significant advancements took place after Kimberly got its street lights (It’s funny how mundane that technology is today) but one could say that that event was the first time South Africa ever experienced technology that was available to the community at large, much like the internet is becoming in country today. So much has happened to South African internet since 1988 when South Africa was granted its first IP address. Some of it good, a lot of it bad. We take a look at Internet in South Africa in the recent past, its present and predicted its future- and discuss some its great successes and worst failures.

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Image Credit: Design Indaba

Amidst all the labour unrest in the mining sector, corruption meltdowns in government and civil unrest across the country there is this loud and unseen world South Africans are fast calling their second home-the internet. Research concluded in 2012 showed that South Africa had over 8.5M internet users, of which, 6.3M are on Facebook. This brings S.A’s internet permeability to 17%, which is a growth of 25% from the research concluded in 2010. A more recent study by the DMMA however, puts South African internet usage at 14M in 2014. This high rate of growth has been springboked (trying to coin a proudly South African phrase) by the explosion of smartphones in the South African market. There were approximately 20M smartphone users in South Africa at the end of 2013, a huge 32% jump from the previous year. This figure is surprising as it is higher than the actual number of internet users in S.A. Although Arthur Goldstuck, MD of World Wide Worx, believes that the data is flawed for South Africa, and is based on well-known flawed data which uses the adult population as the base (Without youth stats we really got nothing). Still, even with this, internet in South Africa is growing at alarming rates and that is still pretty easy to see.

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World Wide Worx Logo

Here’s the shock- One would think that with its developmental edge and its rapidly growing internet statistics, S.A should at least be second if not first in Africa for internet usage and access, but that is not the case. South Africa is actually ranked 5th in Africa for individual internet usage and 92nd worldwide. Putting us well behind Kenya, Egypt, Morocco & Nigeria. The latter enjoying a 27% internet permeability, with 45M Nigerians having access to the internet in 2012, in comparison to South Africa’s 17% internet permeability. S.A is only forecasted to reach 27% in 2017. When following our internet growth since 2008, one will notice that South Africa is failing dismally to rollout internet accessibility, increase permeation and improve the infrastructure to do so. A survey released last year by Stats SA adds to this truth: In 2013, it revealed that less than 10% of South African households had access to the Internet at home! So when it comes to fixed broadband penetration, South Africa is ranked 111th worldwide, with 2.2 out of every 100 people enjoying fixed broadband subscriptions – well below the global average of 9.1. It is therefore ranked 44th among developing countries for household internet access, and just above the 24% average for the 128 developing countries measured.

However, for mobile broadband – which allows people to access the web via smartphones, tablets and wifi-connected laptops – South Africa ranks 62nd worldwide, with a connection rate of 26 out of every 100 people, compared to the global average of 22. UN Broadband Commission co-vice chair Hamadoun Toure said in a statement, “While more and more people are coming online, over 90% of people in the world’s least developed countries remain totally unconnected.” Some South Africans make up part of that figure too, with 6.3% of households in South Africa not having access to either landlines or cell phones, period. Not a good fact at all for internet in South Africa.

So what’s the cry Caroline? Why is South Africa performing so grimly in the internet game? It all falls squarely on the shoulders of South African telecommunication infrastructure and coverage, or rather, the lack thereof. SAT-3/WASC, one of the primary South African submarine cables providing South Africa with Internet (it is majority owned by Telekom) has been repeatedly strained by the unexpected explosion of internet in South Africa and other western shore African countries over the last two decades. The latest upgrades to SAT-3/WASC have been promised to lighten the load of usage. But SAT-3/WASC isn’t the only cable currently providing South Africa with internet access, the heroic SEACOM submarine cable that runs from South Africa to Egypt via Mozambique, Madagascar, Tanzania, Kenya, Djibouti and Saudi Arabia, connecting eastwards through to India and westwards through the Mediterranean has become a much needed support for the South African internet infrastructure. It is also privately owned, although 73% of the ownership is African. The East African Submarine Cable System (EASSy) and the West African Cable System (WACS) are also important cables supporting our internet infrastructure and connecting us to the rest of the world. We even have the emergence of privately owned IP providers installing private fibre optic cable networks such as Liquid Telecoms, who built the largest single fibre network in Africa covering over 17,000km from Uganda to Cape Town, helping to provide high-speed, cost-effective broadband services to more remote areas – it has grew an illustrious African fibre map. Satellite providers such as YahClick have also entered the fold, although they have been having a little more trouble penetrating the South African consumer market.

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Big Data providers such as Vodacom are charging South Africans an arm and a leg

So, with all this seemingly bustling internet infrastructure in South Africa why is our coverage legendarily low? And why do so many South Africans, across the class spectrum, suffer from poor internet speeds? The fact is, what we have is just not enough in a rapidly changing global technological landscape. In the recent Akamai State of the Internet report, South Africa’s average internet speed was 2.3Mbps, well below the Europe, Africa and Middle East average of 4Mbps. Our peak internet speeds were recorded at 9.1Mbps, dismally low and way below the United Arab Emirates peak speed of 41.7Mbps, and the Emirates aren’t even in the top 10 peak internet speeds in the world. We are lagging behind terribly. Only 7.4% of South Africans experience internet speeds of up to 4Mbps and only a lowly 1.3% experience speeds of 10Mbps or more. The Akamai Report then goes on to expose that our average mobile internet speeds are more than twice as slow as our African counterparts profiled in the report. South African mobile internet speeds average 0.6Mbps and peak at only 3.1Mbps. This pales in comparison to Morocco’s average mobile internet speed of 1.7Mbps and peak speed of 15.5Mbps. So although our mobile internet permeability in S.A may be one of if not the highest on the continent, our infrastructure is letting us down. We obviously can’t rely on federal internet infrastructure alone and need more private sector investment in South African internet infrastructure.

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One should very well ask therefore, if only 1.3% of South Africans can experience internet speeds of 10Mbps, why do internet providers such as MTN, Vodacom, Cell C and Afrihost sell internet packages for up to “42Mbps”? One of South Africa’s foremost champions of the internet, Alan Knott-Craig, the combative CEO of Cell C, said about LTE (Long-Term Evolution) at the AfricaCom conference in Cape Town last year, “What are you going to do with [faster data on] LTE? You can’t speak any faster.” Although he was arguing for cheaper data costs, Knott-Craig understands that there is no point of speaking about speed when there is no accessibility.

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With South African peak internet speeds being up to five times slower than that of countries with more advanced internet infrastructure, why are our data providers selling us our internet at twice the price of that of more advanced countries? According to an article by valme.io , South Africa is ranked 79th in the world for internet prices, making us the third most affordable country in Africa when it comes to connecting to the net. South Africa averages R499.00 p/m Or $45.47 for a 10Mbps download speed package. This means that our cost per Mbps is $4.56/R49.15. Making us 4 times more expensive than 50 other countries in the world (Only 100 countries were surveyed in this particular report). So, not only are our speeds archaic, but we are also getting charged heavily for these dismal speeds in relation to the service we receive. What’s the right way? At the same AfricaCom in Cape Town Last year, CEO of Cell C, Alan Knott-Craig said, “We need to be talking not 5c a Meg but 5c a Gig,” to applause. But the current state of affairs is more dismaying, with Vodacom charging its customers up to R2.00 per Meg, out of bundle. This means that a Gig will cost you R2000.00 out of bundle on Vodacom! Led by Alan Knott-Craig, Cell C launched a massive price war earlier this year (Although they claim it was only to grow market share) when they started slashing costs for their users. This ended up leading to a court forcing Vodacom and MTN to slash their prices too– a victory for smaller telecoms in S.A and for mobile accessibility in general.

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Alan Knott-Craig Sr.

While all the data on South African internet usage, accessibility and permeability is not stacked in our favour, one part of this interesting dimension is- E-commerce. In fact, one could say it’s damn near impressive. Arthur Goldstuck, MD of World Wide Worx, calls E-commerce “The quite engine of South Africa’s economy.” In a report authored by him and published in 2012, he showed that E-commerce in South Africa contributed to 2% of our Gross Domestic Product (GDP), roughly R59-billion- compared to the R1billion government was spending on infrastructure. E-commerce is growing at a rate of around 30% a year, with the growth showing absolutely no signs of slowing down. According to SME Survey 2012, which is the original representative survey of small and medium enterprises in South Africa conducted by World Wide Worx, 410,000 SMEs in South Africa have a website, representing 63 percent of active, formal SMEs. Sectors with a particularly high likelihood of SMEs having a website include Information Technology 89%, communications 76% and tourism 77%. Only 5 percent of those with a website are running at a loss, while 16 percent of those without a website are in the red, according to the World Wide Worx Report. The report goes on to say, “The full impact of these websites on the economy is placed in perspective by the number of SMEs that would not have survived without a website. Approximately 150,000 SMEs in South Africa would not be able to survive without their Web presence. With SMEs accounting for about 7.8-million jobs in South Africa, this means as many as 1.56-million jobs would be in jeopardy were it not for the Internet.” Nigeria’s E-commerce on the hand only accounts for 1.1% of its GDP, almost half of ours. .According to another report by the IAB South Africa (Formerly DMMA), 46% of online shoppers in S.A. are found in Gauteng. While 22.60% are found in the Western Cape with the biggest age group among online buyers in S.A. being 60+ (WTF right?). With the internet, more and more South Africans are laughing all the way to the bank.

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Arthur Goldstuck of World Wide Worx

It’s clear when you study internet cables of the 50 more internet-developed countries than us that private sector truly has the last say in terms of a nations internet infrastructure. This is driven in countries like Japan, South Korea, America and England by domestic technology developers and creators. There aren’t nearly enough well recognized tech and IT companies in South Africa that cater to foreign markets. African, and South Africa included, does not create technology for global or domestic consumption. This is the problem. Without a culture of technological advancement, and technological innovation, it is almost impossible to coerce infrastructural development. Necessity is the not only the mother of invention but advancement. Worldwide, countries with high internet infrastructure are characterized not only by having a greater internet permeability but also by their ability to create technology that can be shared with the rest of the world. So far only three South African tech companies stand out for me in terms of their contribution to that- Mxit, Naspers, AG Cellular and the new Zest Mobile (Possibly powered by Afrihost). These companies really stand out for us in terms of domestic or foreign contribution to technological culture and advancement. In this case I mean strictly in respects to consumer consumption- as there are many software exports that are used by major tech companies in the world that originated right here in South Africa. Another key issue for us is service within the tech and internet industries. We cannot let South Africa’s mediocre service history impact that of our industry. Just last month, Varsity Breakout itself was offline for almost 1 1/2 weeks due to poor communication and management between our old hosts, Ample Hosting and our current domain providers Afrihost. Although Afrihost was very helpful in resolving the issue and it became clear that the problem was on the side of Ample Hosting.

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South African instant messaging application, Mxit

The impact of the internet on South African society has been phenomenal. According to the No Nonsense Group, there are currently 5.5-6.5M Facebook users in South Africa and over 1.1M registered Twitter users of which 405 000 are active. LinkedIn, on the other hand is used by over 2.2M South Africans. Johannesburg has over 1.1M people on Facebook and 19 684 on Twitter, followed by Cape Town with 856 680 Facebook users and 14 273 Twitter users. At least 62% of Facebook users in South Africa are between the ages of 18 and 35 (That’s more like it). With women accounting for 51% of Facebook users in South Africa, there are more ladies on Facebook than men. There are about 3.5M Tweets per month (80 Tweets per minute). Students use Twitter in South Africa more than members of any other profession- with Artist, Writer & Entrepreneur following respectively. The most interesting recent social media advancement for us is Cliff Central, an online radio channel run by Gareth Cliff (Formerly of 5FM). Cliff Central is one of the first shows to only notice in good time the opportunities social media holds for traditional media, but also to take full advantage of it. We predict the partnership they have with WeChat will make them the most listened to “unradio” show in South Africa by the beginning of next year.

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With seven out of 10 South Africans using their phones to connect to the internet, smartphones are steadily bridging the digital divide. “South Africa faces many developmental problems that make it one of the more complex societies in the world. The country is divided by ethnic inequality and discrepancies in the level of development between different sectors. These obstacles result in disparities in access to Information and Communication Technology (ICT).”- Wikipedia. The extreme economic disparity in country has influenced the digital disparity and more people than you think in South Africa do not have adequate access to the internet. According to Stats SA, less than 10% of South Africans have access to internet. A huge gap in comparison to most parts of Johannesburg suburbia, who have 54.7% access. If government is only spending R1B a year on improving infrastructure, it is clear that only private owned companies like Liquid Telecoms can truly make the difference.

South Africa is one of the most promising developing countries in the world, and certainly the most sophisticated economy in Africa. We can leverage our advancement and infrastructure to our advantage to bolster internet access and usage in the country. Without any stimulation, S.A. internet permeability is already growing at a rate of around 25% and E-commerce at a rate of 30%. But with S.A. ranked at 92nd worldwide for individual internet usage, 111th worldwide for fixed broadband subscriptions, 79th in the world for internet affordability and 97th in the world for internet speeds, it’s safe to say we’re still living in the dark ages of South African internet.

 

By Leslie Makotoko on behalf Varsity Breakout. Commissioned by MAB

Twitter: @Trimm_Ditch