Eckart Zollner, Head of Business Development at New Telco SA.
Access to the Internet is often seen as the last hurdle in bridging the ever-present digital divide. While the technology itself has become ubiquitous and increasingly affordable, Internet access remains out of reach for an estimated four billion people worldwide, including some 22 million in South Africa alone. There are a number of reasons for this, including lack of infrastructure as well as the high cost of the data itself, but the net result is detrimental to the economy in a number of ways. The Internet for All initiative, a partnership between government and private sector aimed at addressing this very issue, was launched recently in South Africa after its global announcement at the World Economic Forum in 2015.
Ensuring the success of the Internet for All venture is crucial, as it will help to stimulate our stagnant economy and return South Africa to a cycle of growth. While naysayers tout a lack of infrastructure as an insurmountable hurdle to the goal of connecting all South Africans by 2020, the reality is that the country is actually well prepared to meet this achievement. Over the past few years, significant investment has gone into the deployment of infrastructure across the board, including internationally through the landing of numerous undersea cables, as well as the development of national, regional and urban fibre networks.
While the basic backbone for access is in place however, a number of challenges remain when it comes to delivering the Internet for All. Key among these challenges is the economic model that has to underpin this initiative. The vast majority of the more than 22 million unconnected people live in the informal and often sub-economic levels, and therefore cannot afford either the device for connectivity or the cost of the data and related services. A fee subsidisation model has to be developed to target these underserviced areas and new deployment models must be created.
For example, a shared service model that does not rely on individual ownership of devices can be a successful starting point. This will not only allow broader access across shared devices such as Internet cafés and public hot spots, but can also empower many entrepreneurs, as they will be able to offer such shared public access services models. These models, coupled with subsidised data rates, were successfully deployed in the early days of the cellular networks, and allowed millions of users to benefit from mobile phone technology. Today, technology allows for many different ways of cross–subsidising data charges, including digital advertising and e-commerce over the Internet, which are just two ways of changing the concept of user payment to service provider payment. Innovations such as these are key steps in ensuring affordable access for all South Africans.
In addition to innovative fee structures that benefit the user, reducing the cost of infrastructure is another crucial step. In the early days of mobile networks, each provider had to have their own towers, a model that is simply not cost effective. However, infrastructure costs have reduced and technology has advanced to allow multiple service providers to deliver services over a common set of infrastructure. This in turn reduces the overall infrastructure spend that providers will have to incur if they work together. Open access infrastructure offers full market reach for multiple services providers, however what is still needed is the availability of the relevant frequency spectrum in geographically dispersed and sparsely populated areas, as this will allow for long-range low-density signal coverage. Open access networks also help to reduce the cost of data, since high data charges are typically driven by the high cost of transporting data. Through large data aggregation and data transport in ultra-high volumes, cost reduction can be achieved. By aggregating data services, providers will be able to reduce data costs substantially.
Internet access in today’s world is no longer a luxury, but a necessity for equal education, improved business efficiency, better governance, enhanced communication, better healthcare and service delivery and simply the ability to keep pace with growth and change in the world. Internet access for everyone will create a platform to lift a large portion of the population out of poverty status, to address service delivery shortcomings as well as to address the education gaps that still exist in our society. In addition, it has become an essential enabler for innovation, opening up opportunities for everyone.
By Eckart Zollner, Head of Business Development, The Jasco Group
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