World Cup kicks off internet growth

Next year's FIFA tournament is driving major public and private investments in South Africa's broadband network.

JOHANNESBURG // Next year's FIFA World Cup is driving major public and private investments in South Africa's broadband network that are expected expand capacity up to four times, according to the former head of the telecommunications company Vodacom. South Africa's business and government leaders are hoping the broadband expansion will help bring down the high price of internet access in the country that has contributed to a "digital divide" between the rich and the poor. "Everyone is kind of shooting for 2010 to make sure that the real big chunky bandwidth is significantly enhanced by the end of this current calendar year," said Alan Knott-Craig, the former chief executive of the Vodacom Group. While South Africa has more than 90 per cent mobile penetration, it has lagged in broadband, with a penetration of slightly more than 10 per cent. Mr Knott-Craig said the lag was caused by the country's fixed-line internet being exclusively controlled until recently by Telkom, a telecoms provider that was 39 per cent owned by the South African government. "In South Africa, we are well behind in broadband because of heavy regulation and no competition," said Mr Knott-Craig, a former Telkom manager until he went to Vodacom in 1993. "But that disappeared two years ago. Two years ago, [broadband penetration] was 2 per cent. So it's quite a big improvement in the last two years." South Africa's second operator, Neotel, was launched in 2006 after legislation made it easier for competitors to enter the market. In 2007, Neotel signed a cable development agreement with Seacom, an international bandwidth provider operating along the east coast of Africa. Seacom's undersea cable linking southern and eastern Africa to Europe and Asia was due to be completed at the end of this month but was delayed by a month because of piracy, Brian Herlihy, Seacom's chief executive, said earlier this month. The Seacom cable is one of several undersea cables in development in southern Africa. Others include the West Africa Submarine Cable that will link South Africa and the west African coastal countries to Europe and come online in 2011; the Glo-1 cable, which will connect Nigeria to the UK and is expected to go live this year; the Main One Cable, which will connect Portugal to Morocco, west Africa and South Africa, and is scheduled for completion next year; the East Africa Submarine Cable System cable, which will connect South Africa and east Africa, due to be finished in the second half of next year; and East Africa Marine System, which will link the coast of Kenya to Fujairah. The developments are expected to reduce the cost of international bandwidth on the continent, in some cases by as much as five times, according to the cable companies. At the moment, much of the bandwidth in the region is provided by satellite. While cables are being laid beneath the waters on either side of South Africa, the country's telecoms are working hard to increase domestic capacity beneath the ground. Telkom confirmed in February that it would have most of the information and technology requirements for the event finished by the start of this month's Confederations Cup, which is being used as a test run for the cup. About 80 per cent of the infrastructure investment is being made by the private sector, with the rest coming from the government, Mr Knott-Craig said. This investment is playing a major role in the development plans of cities. Ian Neilson, the executive deputy mayor of Cape Town, said the city was looking to put in 300km of broadband cables as part of its economic strategy to develop the creative sector. "We work together so that we can have different people putting their cable in the same trench, so we can save lots of money," Mr Neilson said. "In fact we have five different operators in the city putting their cable in at the same time. "I think that is resulting, because of savings, in faster rollout in both mobile phone companies and other internet companies, and in the next 12 months we will start to see better connectivity. I think within the next three to five years we will be well positioned on an international scale as a connected city." Mr Knott-Craig said the broadband industry in South Africa was poised to grow at the same rapid rate that the telephone industry had increased since the end of the 1990s. In 1999, South Africa had 4.7 million telephones for a population of more than 40 million but by this year it had more than 49 million phones, he said. "By the year 2015, this country has to be on the growth path as it has been for telephony," Mr Knott-Craig said. "That means by 2015 half the country has to be using the net." [e-mail]