Late last year Altech won a court case that gave licensed operators the right to self provision their networks - putting an end to the stranglehold Telkom had on the South African telecommunications network.
Ivy Matsepe-Casaburri's policies failed utterly to deliver cheap and abundant bandwidth to South Africa; and yet she refused to budge. She even tried to appeal the ruling. And was denied. With costs. Spectacular incompetence. The free market always beats central planning - ask the (now defunct) USSR.
What does this mean for us in 2009?
Before this ruling, service providers were not allowed to self-provide a network: which means one HAD to use Telkom to connect any two points on a large area network.
All the cell phone providers had to use Telkom to link their cell towers.
All internet bandwidth is controlled (and charged) by Telkom (or more recently Neotel).
Telkom's exorbitant pricing is a significant part of all network costs in South Africa, and, by the nature of things, that cost is passed on to you and me. You know: the brown stuff flows downhill.
In short, no network of significant size could operate without an (very expensive) Telkom link.
Telkom is South Africa's most efficient, most reliable, most cost effective, most customer focused favourite company.
Not.
You see the problem?
After the ruling, ICASA (this month) issued a few hundred VANS licences. These licensees are now legally entitled to build their own networks: they can dig a trench from Cape Town to Johannesburg if they so please and they can afford it.
Cell phone companies can implement their own links between their cell towers. Potentially hundreds of companies can build their own national or metropolitan networks as long as they have a licence and the capital; thereby reducing their operating expenses dramatically.
Neotel and MTN are currently (jointly) constructing a 2 billion rand national network to link all the major centres in South Africa. It will be partially online in 2010 and completed by 2011. It will provide "virtually infinite" dirt-cheap national bandwidth. Other providers are sure to follow suite.
Neotel (the only legal competitor to Telkom for fixed lines) is starting to gain traction. They are using a technology (CDMA) similar to cell phone towers to rapidly install new telephone services in the coverage area of their base stations. By all accounts it looks like they are set to give Telkom a run for their money over the next few years.
And then....tadaaa....the new inter-continental cables:
Several new cable projects are underway to link Africa (and South Africa) to the East, Europe and the Americas. By virtue of the 2010 world cup bandwidth requirements and the requirements of the SKA (Square Kilometre Array) telescope, South Africa will have multiple TIMES more international bandwidth that it currently has.
The first new cable to go live is SEACOM which will be "landed" by Neotel in June this year. This cable is expected to more than double international bandwidth and reduce costs by 50%-80%. Translation: MUCH faster and cheaper international internet connections.
In the works is also the "AWCC" super cable along the west coast of Africa. Promises to deliver 3 840 000 Mbps of bandwidth in time for the world cup in 2010.Then comes EASSY cable, followed by UHURUNET - each effectively adding around 3 840 000 Mpbs of bandwidth.
Given South Africa's ability and tendency to quickly adopt and leverage new technology, it is safe to assume that internet use in South Africa will explode during the second part of the year to embrace a super fast and super cheap "new" internet. Many more businesses will go online and potentially millions of new users will too.
New products and services will be invented and consumed. Radio and TV on demand will be streamed to cell phone users connected to the internet. Millions of people will access web sites geared for cell phones: instant messaging (cheaper and more effective than SMS text messages), email, social networking such as facebook, searching for services, products and prices on Google, download homework, use internet banking, etc, etc.
Web 2.0 services will become widely used (because it is fast and cheap) and millions of people will use online services to write documents, store pictures, create spreadsheets, play games, buy and sell, do business.
Instead of paying "western imperial colonists" (to quite my friends Bob and Julius) US$400 million a year, Africa can satisfy her own bandwidth requirements and transform every aspect of it's societies and business over the next few years.
From personal networks to politics to business to education. The internet is a powerful, world changing tool. At last Africa will gain real access to it.
It's going to be an interesting year.
Posts
