News

Industries

Companies

Jobs

Events

People

Video

Audio

Galleries

My Biz

Submit content

My Account

Advertise with us

SA Internet has 3 million users

Three million South Africans has access to the Internet, representing only 1 in 15. This compares with 1 in 2 in countries like the USA. At current growth rates only 1 in 10 South Africans will have access to the Internet by 2006.

According to a new study by World Wide Worx, 2.89 million South Africans had access to the Internet at the end of 2001. This number will grow to around 3.1 million by the end of 2002.

"The Goldstuck Report: Internet Access in South Africa, 2002" reveals that only 1 in 15 South Africans had access to the Internet at the end of last year. This has emerged from a six-month research project led by Arthur Goldstuck, managing director of the technology-research and consulting company World Wide Worx. By the end of 2002, Internet access will have improved only marginally, to 1 in 14 South Africans.

According to the report, the slow growth is largely a factor of delays in licensing a second network operator, Telkom's own uncompromising attitude towards ISPs (Internet Service Providers), and market ignorance about the continued value of the Internet in the wake of the technology market crash of 2000 and 2001.

The key findings of the report are:

  • One out of every 15 South Africans had access to the Internet at the end of 2001. This compares with at least one out of every two people in countries like the USA, Canada, South Korea, Singapore, and Hong Kong. China, at 1 out of 18, is catching up fast despite its huge population and underdeveloped infrastructure. At current growth rates there will still be only 1 in 10 South Africans with Internet access by 2006.

  • Sluggish dial-up growth stands in dramatic contrast to the growth in the total number of leased lines - permanent high-speed connections to the Internet - installed in South African businesses. The number reached just under 7000 at the end of 2001, reflecting an insatiable demand for bandwidth among corporate users of the Internet. This year the number of leased lines will see a growth rate of around 20% in total market size.

  • Only a small handful of ISPs are profitable, but there is no specific business model that guarantees profitability. Neither size (small or large), nor target market (corporate or consumer) is an indicator of success. In the corporate market, Internet Solution is the most profitable ISP, while in the dial-up space, World Online is the only major ISP operating profitably. An increasing number of ISPs are profitable on an EBITDA basis (Earnings Before Interest, Tax, Depreciation, and Amortisation). In short, it is no longer uncommon for ISPs to be operating profitably, but they still have a legacy of debt.

  • The number of ISPs has grown dramatically in the past year, largely due to the rollout of a virtual ISP service by Internet Solution and the continued heavy use of the equivalent service from SAIX.

  • Business strategies in the ISP industry are maturing to the extent that it has become possible to create a model that explains not only how ISPs evolve, but also how they meet their clients' needs as those needs evolve. Goldstuck has been developing the model for several years, and presents the complete version for the first time in this report.

  • While the industry faces seemingly insurmountable challenges, it remains a stable industry. Only a tiny proportion of ISPs in South Africa have gone out of business through bankruptcy.

  • Mobile access to the Internet has been a non-starter, with only a tiny proportion of those people who have appropriate devices actually using the devices to connect to the Internet.

  • The arrival of GPRS, the so-called 2.5 generation of mobile network technology, may alter the mobile access picture during 2003, but only if appropriate handsets become available.

  • Community centres, resource centres, and digital villages in townships will continue to underachieve in their goals of bringing Internet access to a sizeable proportion of residents in disadvantaged areas.

"There are positive signs amid the access gloom," Goldstuck points out. "The educational environment, in particular, is poised for a boom in access, with numerous projects under way to connect schools to the Internet. That will not only be a positive intervention in the short term, but will provide a healthy underpinning for long-term growth of Internet access in South Africa."

Contact

World Wide Worx
Arthur Goldstuck
(011) 886-7976
www.theworx.biz

Let's do Biz