SA broadband doubles in two years as mobile data costs plummet

In any emerging market country, getting people online is vital. Studies by the likes of Ericsson have concluded that for every 10 percentage point increase in broadband penetration GDP increases by one percent.

That’s why news that broadband access in South African has more than doubled in the past two years should give hope to people in that country.

According to a new report from tech research company World Wide Worx, access to broadband has accelerated on the back of falling mobile data costs and accelerated network roll out.

The report shows that the number of broadband subscriptions grew from 3.6-million at the end of 2010 to an expected 8.2-million by the end of 2012, representing 128% growth.

It should be noted that a number of people have multiple forms of broadband access – such as an ADSL account as well as 3G — while many hop between operators to take advantage of promotional offers.

That means that the actual number of broadband subscribers is much lower at an estimated 6.7-million. That’s still a lot more than the 2.8-million individual subscribers there were a couple of years ago.

Measured by subscriptions, South Africa now has an apparent 15.8% broadband penetration of the population. However, due to extensive multiple-use of broadband subscriptions, especially thanks to the falling cost of data and the proliferation of promotional offers, the number of individuals using broadband subscriptions represents only 11% penetration of the population.

By way of comparison India has 20-million broadband subscriptions, representing a much smaller percentage of the population. In Russia meanwhile, broadband a quarter of all households were expected to have fixed broadband by the end of this year.

“The migration from fixed line to mobile represents a profound shift in the way South Africans consume content,” says Justin Zehmke, Executive Producer of howzit MSN. “The 9-5 internet peak, along with the traditional desktop publishing and advertising model that has become the South African standard, will become increasingly irrelevant. Coupled with the availability of cheaper mobile devices, this presents an opportunity for smaller publishing and tech companies to enter a market traditionally dominated by a few major players”.

Mobile rules

If you wanted a clear indication of why any online business’ focus should be on mobile, the fact that hat the total number of fixed line broadband subscriptions is now outnumbered 8 to 1 by mobile broadband subscriptions should do nicely.

The rise of mobile means that the country’s majority fixed-line operator Telkom now only holds 10.6% of the broadband subscriber market in South Africa. Even it’s realised how important mobile is and, in time, may come to be dependent on 8.ta, its play in the arena.

World Wide Worx managing director Arthur Goldstuck acknowledges that the broadband infiltration rate might seem low but is still way ahead of where the country was a couple of years ago. “It suggests that, five years from now, mobile broadband and smartphones will be the conventional means of access, rather than fixed line, which will increasingly be confined to small business.”

Zehme meanwhile believes that the growth in broadband access suggest that the country “will see a major shift in the type of content supplied and consumed, with mobile apps and services at the top of the industry’s priority list.”