Telkom’s new broadband officer, Alfonzo Samuels, was recently quoted as saying that the lack of local content is one of the main reasons for the high cost of broadband in South Africa. Samuels felt that he was misquoted in this article and said that he merely pointed to the fact that more local content can have a positive effect on broadband in South Africa.

His statements regarding the hosting of local content have created an uproar in the broadband community which will be hard for the fixed line provider to subdue. It is undoubtedly beneficial to a broadband provider if they can carry the majority of the traffic on their own network, limiting the need to purchase costly international bandwidth.

It is also true that broadband providers, web surfers and IT companies will benefit if local content is hosted locally, which prompts the question as to why many South African websites catering for South Africans are hosted internationally.

The reason is simple: Cost. The high cost of local bandwidth is forcing more and more local website owners to move their sites overseas. A simple comparison shows that a Telkom Shared Web Hosting Package with a maximum monthly traffic usage of 150 MB is over 2 000 % more expensive than a far superior un-metered (unlimited traffic) offering overseas.

For high traffic sites the situation is even worse since the website owners must pay average rates of around 20c per Megabyte for traffic whereas the overseas equivalent is unmetered. The cost of hosting a high traffic site locally can add up to thousands of Rands per month for something you can get for a few dollars in America or Europe.

Unsurprisingly many high traffic website owners are going for the cheaper option, which means that local hosting companies are losing revenue.The money from local websites that should be flowing into the pockets of local hosting companies is now flowing out of the country. Telkom’s decision to introduce a hard capping policy, preventing the differentiation between local and international usage, was the final nail in the coffin for many webmasters.

There is now no distinctive advantage for local websites to opt for a more expensive local hosting package. One of the sites affected by the restrictive local bandwidth costs is the famous Hellkom ( website. Gregg Stirton, founder of Hellkom, is not happy about the situation. “Hellkom has been hosted abroad since the bandwidth usage became too expensive in South Africa. The site is now hosted in Germany, and I have six times the transfer limit I had in SA,” he said.

“It is a real pity that local sites are forced overseas due to bandwidth prices, as money and business is being sent out of the country to companies overseas, when it's the local companies who need the money more than them,” he continued.

Telkom has responded stating that based on the economies of scale achieved by the American and European markets it is conceivable that hosting in South Africa would be more expensive.

Telkom also said that TelkomInternet is pursuing a utility hosting model that will match international standards and conform to local operational costs, which will encourage the development of local content. Many ISP’s however feel that Telkom is not doing enough.

There is a strong feeling within the industry that the incumbent should differentiate between the cost of local and international bandwidth which will help to stimulate local hosting and local content provisioning.

The differentiation between local and international bandwidth is also addressed by ICASA. In it’s recently released ADSL draft regulations ICASA called for local traffic not to be counted towards the cap. The aim of this regulation is to further stimulate the drive to produce local content hosted in SA.

Telkom passes the buck when it comes to a split between local and international capping, saying that “any caps that are to be applied would be applied by the ISPs themselves and, due to the very competitive nature of the ISP market in South Africa, end users would be free to choose the ISP that provides the packages that most suit their individual needs.”

Telkom further states that “the current network architecture does not allow a split between local and International traffic. As the network operator, Telkom can only provide details on the total access usage.”

Cheaper local bandwidth and innovative products like Internet Solutions’ local-friendly ADSL offering can go a long way to stimulating the growth of local Internet content and to lure internationally hosted websites back to South Africa.

It is truly unnecessary that local websites designed for local users must be hosted in a foreign country, but without true dedication from Government and Telkom it is unlikely that local will be lekker soon.