The growth of South African broadband Internet access over the next five years is likely to be driven by the country's mobile network operators.
That's according to Mark Taylor, MD of Nashua Mobile, who says that MTN and Vodacom are emerging as major players in the South African broadband market as they continue to drive data tariffs down even as coverage and connectivity speeds of their mobile services improves.
Says Taylor: "Between them, MTN and Vodacom already have close to 500 000 3G and HSDPA data card users, while Telkom only has about 420 000 ADSL subscribers. The gap between the mobile operators and Telkom is likely to grow significantly in the next few years as Telkom continues to struggle to service the pent-up demand for its ADSL services.
“A customer might need to wait for up six to eight weeks for an ADSL service to be installed, but can get up-and-running immediately with a cellular data card,” notes Taylor.
In addition, mobile data services are available in many parts of the country that are under-serviced by Telkom. Many users also see the ability that mobile broadband gives them to be connected wherever they are as a major benefit, although there is a danger that 3G and HSDPA networks may become congested as a result of mass-market adoption.
“Operators will need to keep investing in their networks to keep ahead of demand, since many users may switch back to ADSL if they experience slow or unreliable connections on the cellular network,” Taylor says. “Of course, many customers will still want a fast, low-latency ADSL connection at home or work for high-end applications, and may complement this with a cellular data card for mobile use.”
Taylor believes that the growth in the broadband market is going to come from three major sources: the emerging black middle-class, the existing pool of dial-up Internet users, and businesses, particularly small and medium-sized enterprises, that roll out mobile data applications.
He notes that broadband technologies – wireless, mobile and ADSL – are all becoming more accessible to the mass-market and prices compare favourably to dial-up for even light Internet users. For example, a user can access a basic 384kbps ADSL subscription with 1Gb of ADSL data for a year, a router and a 4Gb POP mailbox (excluding analogue line rental and calls) for as little R139.00 per month, from Nashua Mobile on a special that will last until 31 March 2009.
“We’re bringing more competition to this market, and hope to help drive prices down even more as and when the opportunities arise,” says Taylor.
Businesses are also expected to be enthusiastic adopters of mobile broadband solutions over the next two years. The technology for mobile computing – handheld devices as well as cellular connectivity – is now stable enough to underpin mission-critical processes and affordable enough to be in reach of smaller businesses.
Couriers, estate agents, and mobile sales forces are just some examples of users that are expected to aggressively adopt mobile broadband solutions over the next two years.
Taylor expects that the mobile data market will continue to grow as the network operators introduce newer and faster technologies such as High-Speed Uplink Packet Access (HSUPA), the next evolution from HSDPA, and eventually, Super 3G, which will provide download speeds of up to 100Mbps.
“Wimax will eventually emerge as a force to be reckoned with, but the slow process of spectrum allocation means that cellular technologies will remain at the forefront of the market for the next two years,” says Taylor.
Eventually, however, cellular networks might reach the broadband market with a mixture of wireless broadband technologies like Wimax and GSM-based technologies like HSUPA and HSDPA where it makes sense.