Southern Africa leads the way with new trends, says just-published report

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Africa's largest Sub-Saharan Internet sub-region, Southern and Central Africa leads the way with new trends, says a new report out this week. Outside North Africa, Southern and Central Africa has some of the most developed internet country markets on the continent. As a result, a number of trends developing there are beginning to spread across the continent. These are the findings of a new report published by Balancing Act this week.

Because of the size of the markets, a number of interesting trends emerge from the findings of the report:

*  Largest broadband market: South Africa is leading the way with the implementation of broadband. It ended 2005 with 120,000 users and these are set to double this year, according to one of the report's authors Arthur Goldstuck. South Africa is currently the largest broadband market in sub-Saharan Africa. Incumbent Telkom remains the dominant provider with the two fixed wireless providers (iBurst and Sentech) making only a small dent on the market. Of the mobile providers Vodacom has taken an early lead and is likely to prove hard to catch. But Telkom looks like delaying further price falls until it has finished mopping up the Small and Medium-sized Enterprise (SME) market. However Goldstuck predicts that Telkom will face stiffer competition from non-DSL providers in the coming year.

*  First in for legal VoIP in a major market: South Africa now leads the way on opening up its markets to VoIP-based calling. It was first major market to legalise VoIP but it has been slow to take off because of obstacles to interconnection thrown up by incumbent Telkom. Although Telkom has acknowledged that licensed operators have a right to interconnect, the company appears to be trying to spin out the process of reaching an agreement. Two initial applicants have been refused an agreement. Because of its civil war, the DRC has been a technical innovator licensing satellite VoIP payphones and making wide use of wireless technologies. At least two other countries in the region (Zambia and Zimbabwe) have embarked on policy processes that will see some for of VoIP legalisation.

*  The introduction of infrastructure competition: Outside of South Africa, competition on (fibre) infrastructure has appeared with four companies getting licences, two in Zambia and two in Zimbabwe. Most of these companies are power utilities for whom providing fibre infrastructure poses a significant number of new business challenges. But the network of regional energy providers provides plenty of potential for connecting the region. The results of competition in the infrastructure field have been mixed as it is relatively recent and as yet it has not produced big advances either on price or service.

*  High cost of international fibre deters growth: One of the key factors stifling growth in the region is the high cost of international fibre connectivity. Only three countries in the region are members of the SAT3 consortium: Angola (Angola Telecom); Namibia (Namibia Telecom) and South Africa (Telkom South Africa). Namibia has no landing station. At least three countries in the region are using satellite providers rather than connect via Telkom to SAT3 because of the high prices it charges on the fibre. Elsewhere in the world, fibre is generally cheaper than satellite for higher volume traffic. A new cable (EASSy) is to built on the East coast of the continent but the ownership structure and access to it have not yet been fixed.

*  First Muni Wi-Fi network: With a population of only 50,000, South Africa's seaside town Knysna takes the honours for being the first municipal network. Built as a public-private partnership, it seems to offer a way forward and all of South Africa's larger municipalities are now considering rolling out similar municipally-inspired networks. Whatever the debate about the different roles of the public and private sectors, there is little doubt that if this kind of initiative can be got right it will enormously increase the speed of roll-out on the continent. The interest now turns to where the first municipal network will be built north of the Limpopo.

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