Telecoms in South Africa: Touch Today

Seacom’s undersea fibre-optic network was completed and went live on Thursday 23 July 2009. Nostalgic musings about the Mesozoic era war cry of a dial-up modem may now be relegated to the category of conversation that includes ‘when I was a child, I used to go to the cinema and get home on the bus, buy the ticket, pop-corn and a drink for 5 cents’.

This 1.28-tetrabyte-a-second, 17 000 kilometre cable system has created a greater connectivity for the east coast of Africa than has ever been previously available. Another innovation that will soon be available to Africa is the planned launch of a satellite by Bermuda-based satellite service provider Intelsat in partnership with South African Investor Group, Convergence Partners that will be ideally positioned to serve the African continent.

This has created an opportunity for service providers in South Africa to create genuinely competitive products and provide South Africans with fast, cheap and high capacity internet connections. This is not just for everyday South Africans to be able to have better speeds for browsing, downloads (legal downloads, of course), but also for business and being able to conduct business globally from a South African based office. ‘Live-internet feed’ may become a concept regular South Africans can experience first-hand.

The world has moved to an era of reliance on the internet and instant communication. The cable has the potential to open communications for business globally and create a far greater lure for foreign investment in South Africa. It has also created an opportunity for South African internet service providers to provide a fast, cheap and reliable internet connection. The Seacom cable, amongst others, will, hopefully, drag South Africa out of yesterday and cause it to be in touch with today’s modern world of communications by providing South Africa with cutting edge technology to do so.

In response to the growing telecommunications industry in South Africa, newly appointed managing director of Telkom SA, Nombulelo Moholi has recently been quoted in the Financial Mail as saying “our approach is to fight for Neotel, Vodacom and MTN to buy [services from us] and not to build their own networks.” Telkom seem to have missed the boat, or rather, seem to have been left off the mailing list. South Africans do not want to rely on one service provider. We want to be able to choose our service provider and, if we are not satisfied with the service, to change our service provider. Perhaps no further complaints will be made to the Independent Communications Authority of South Africa about our mobile telephone service providers. The complainants will merely change service providers.

Poor telecommunications service in South Africa seems to be a common theme of discussion at the moment and it is about time a greater choice was presented to South Africa.

Telkom’s dominance of the fixed line telecommunications industry is not a unique scenario. South Africa has some of the most advanced competition law in the world yet seems to have a lack of competition in the telecommunications industry. For example, South Africa has one satellite television service provider. Despite being season one of a series that ended ten years ago, you are more likely than not going to sit and watch that episode again.

There is no other choice. We continue to pay an expensive monthly bill to have satellite television, but there is no real alternative: either pay more and have a hundred plus private channels of uninteresting television as opposed to four public channels of uninteresting television. On the upside, however, South Africans may soon be able to enjoy a choice of satellite television providers with new service providers planning on entering the South African market in the near future.

Another industry (and one that is more pivotal to economic growth in South Africa than satellite television) with a lack of competition that has destroyed the need to provide a competitive service is the electricity industry. Despite the term ‘load-shedding’ becoming a frequently used and common colloquial term in South Africa, the sole electricity provider has been able to push up its prices for the same service it always provided before the load-shedding saga. Thankfully load-shedding appears to be something of the past.

With the 2010 World Cup under a year away, this is the perfect opportunity to advance industries such as the telecommunications industry. The FIFA requirement that all stadiums for the World Cup must be able to broadcast in high definition is one of the minor telecommunications advancements that will soon be available to South Africans. With the plethora of foreigners who will be descending upon our shores next year, South Africa has an amazing opportunity to showcase itself as a centre for world business and investment. An important part of this showcasing will be the ability to communicate globally with the latest technology available today.

With Neotel being key customer for the Seacom cable in South Africa some healthy competition will hopefully be created in the telecommunications industry. Service providers need to start offering better prices and service to encourage customers to continue to use their services rather than use their competitor’s service. The problem is, they do not need to, they have no competition. Yet.

By Ismail Laher