This document is offered compliments of BSP Media Group. www.bspmediagroup.com All rights reserved.
This document is offered compliments of BSP Media Group. www.bspmediagroup.com
All rights reserved.
Broadband in South Africa:
The Roadmap to Growth
Africa Com
Carel Booysen
Executive: Business Broadband Portfolio
2013
1. The effect of broadband and the Internet on innovation and growth
2. How does South Africa rate on innovation?
• Infrastructure
• Human capital
3. Challenges of Broadband in South Africa
4. National Broadband Policy
5. Public and private sector partnerships
6. Telkom response
7. Human capital and personal digital readiness
8. Digitisation trends and the future
Agenda
1. Enable access to a global platform of knowledge that accelerates and enables further
invention and innovation
• Best and brightest ideas
• Known to billions of people
• “Global knowledge bootstrapping”
2. Exponentially increase the ability of people to create, exchange, debate, ideas and
knowledge – the building blocks for innovation
• Debate and paradigms can spread around the world in days
• Viral spread of the best views and ideas
3. Paradigms that made mobile technology accessible to the developing world, like
prepaid, can be used to address other critical development needs
• Mobile payments
• Prepaid electricity
Source: Global Innovation Index 2012, Chapter 9
Why the Internet and Broadband transformed innovation
Correlation of Fixed Broadband Penetration and Country Competitiveness
The Internet globally creates more SME jobs than it destroys
Source: McKinsey, 2011
SMEs using Web technologies extensively are growing more quickly
South Africa’s ranking on Global Innovation Index
Source: Cornell University & INSEAD, 2013
Factor (out of 84) RSA Rank
ICT access 86th
ICT use 86th
Government’s online service 81st
E-participation 79th
Pupil-teacher ratio, secondary 107th
Tertiary education 141st
Gross tertiary outbound enrolment 135th
Overall ranking: 58th out of 142.
Infrastructure
Human Capital
Affordability
Coverage
Speed & Performance
The challenge of Broadband in South Africa:
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Note: 1Based on census information from 2007
South Africa
Lesotho Cape Town
Johannesburg and Pretoria
• Mid and high income areas are highly concentrated in few urban and suburban areas • 59% households represent 83% of total income • Value and Population concentration make the case for infrastructure roll-out very challenging
Low income areas Low-mid income areas Mid income areas Mid-high income areas High income areas
Source: Telkom Internal
Economic vs Geographical Challenge: <2% of SA’s area concentrates 50% of population and 77% of national income
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Source: World Bank, Eurostat, DMMA
Source: Digital Media and Marketing Association, South Africa
x SA has less than half the relative internet access than the OECD average (±75%)
But there has been a recent acceleration and the gap will close as OECD saturates and new technologies proliferate in SA
Internet Access: SA vs. OECD
Government’s broadband and ICT aspiration
Government’s stated commitment is to achieve 100% broadband access and 1 million linked jobs by 2020
• SA places 70th in the WEF ranking of 144 countries on Broadband readiness
• Increasing broadband can have a material impact on economic growth. The World Bank estimate that 10% increase leads to 1-1.4% increase in GDP.
• If done effectively, broadband penetration could have major impact on productivity, growth, and employment.
• National Broadband Policy: South Africa should have a target of universal broadband, offering a minimum download speed of 100Mbit/s to four-fifths of the population, by 2030
• Icasa is required “to ensure the rapid assignment of high-demand spectrum required to extend the wireless component of the open-access broadband network by mid- 2014”.
But also diverse Interests Public Sector – Policy Objectives & socio-
economic development
Private Sector – Commercial Objectives & ROI for Shareholders
Th
e D
igita
l D
ivid
e
Private sector ROI unattractive. PPPs drive progress
Private sector ROI often very long term - Investment stimulation &
incentives helpful
Private sector ROI attractive: prevailing regulation/policy
effective
12
Public and private sector partnerships are critical
Diverse strengths Public Sector – Legitimacy, strategic agenda,
ability to align various levers of influence; different ROI criteria, some delivery capacity
Private Sector – Delivery capacity, innovation, technical know-how
Telkom’s key network transformation focus areas
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FTTH (100+ Mbps)
FTTC (up to 40 Mbps)
Local Exchange Upgrades (10 Mbps) LTE Access and
Satellite repositioning
Improved Aggregation and better Customer Experience
Access Agnostic Core and IMS capability
Evolved from Gbit/s to Tbit/s with enhanced resilience and manageability
World wide reach with superb capacity and resilience
Building a Service
Oriented Architecture (SOA) for
NG Products
and Services
State of the Art
Network Operations
Centre
Technical testing
South Africa’s ranking on Global Innovation Index
Source: Cornell University & INSEAD, 2013
Factor (out of 84) RSA Rank
ICT access 86th
ICT use 86th
Government’s online service 81st
E-participation 79th
Pupil-teacher ratio, secondary 107th
Tertiary education 141st
Gross tertiary outbound enrolment 135th
Overall ranking: 58th out of 142.
Infrastructure
Human Capital
Age
Education/skill
Access We need digital access to become familiar with and engage with the digital realm. Access includes connection, device and affordability
“Youth” or “Gen-Y” are overwhelmingly more comfortable, participative and productive in digital environments
More educated people are more able to engage with and adapt to digital worlds
Hypothesis
% Population (or Staff) with access to the Internet
% population or customer base or staff 24 years old or younger
% customer base or staff with at least secondary education*
* Considered Literacy but too broad; HDI but includes inappropriate factors
Possible Measures
What influences personal digital readiness?
A Possible Model for Personal Digital Readiness
Age
Ed
ucati
on
/skill L
evel
≤ 24 Yrs ≥ 25 Yrs
Secondary
School +
Not
com
ple
ted
Secondary
Scho
ol
Pace-setters
Hopefuls Digitally Disempowered
Cautious Rationals
With Access
Digitisation Big D
ata
Mobility & UC
Change in Competitive Imperatives
Broadband and the Internet enables digitisation trends
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Dig
ital
an
d
soci
al
me
dia
Broadband
and Internet underpins
Some Gartner predictions for the future
Source: Gartner Group, 2013
• By 2020, the labour reduction effect of digitalization will cause social unrest and a quest
for new economic models in several mature economies.
• By 2017, over half of consumer goods manufacturers will employ crowdsourcing to
achieve fully 75% of their consumer innovation and R&D capabilities.
• By 2020, enterprises and governments will fail to protect 75% of sensitive data, and will
declassify and grant broad/public access to it.
• By 2020, the majority of knowledge worker career paths will be disrupted by smart
machines in both positive and negative ways.
• By 2020, consumer data collected from wearable devices will drive 5% of sales from
the Global 1000 companies
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