Business, Economics and Jobs

Pigeon beats South Africa's slow internet


JOHANNESBURG, South Africa — South Africa may be the powerhouse economy of the continent but it lags far behind even other African countries when it comes to internet usage.

Going online in South Africa is expensive and frustratingly slow, perhaps best exemplified by the story of Winston the pigeon, who last year famously proved that it was faster to send data by carrier pigeon than on an ADSL line operated by South Africa’s main web firm. To the surprise of few internet users in South Africa, Winston flew a 4GB memory stick 60 miles in the same time the Telkom line had sent only 4 percent of the data.

But this may finally be changing. A new study has found that the number of South Africans going online via broadband internet connections had grown by more than 50 percent in the past year, thanks to new undersea cables and the licensing of greater numbers of service providers that has started to result in cheaper, faster internet. (Read about Sierra Leone's efforts to connect to fiberoptic cables.)

After years of relatively stagnant growth, the number of internet users in South Africa jumped by 15 percent in 2009, and is forecasted to grow by a similar rate in 2010, according to the study by Johannesburg-based technology market research organization World Wide Worx and Cisco, the networking equipment firm.

There are now more than 5 million internet users in South Africa, or 10 percent of the population of 49.3 million.

“It’s people who are economically active and have computers but previously found it too expensive to come online,” said Arthur Goldstuck, managing director of World Wide Worx.

Most of the growth in broadband internet came from small- and medium-sized businesses upgrading to ADSL, which in turn provided internet access to more than half a million South Africans working in offices who were not previously online. The study also found that larger companies are increasingly giving 3G cards to their employees so that they can work outside the office, driving growth in wireless internet. The number of wireless internet subscribers jumped by 88 percent in the past year, and high speed internet connections by 21 percent.

Despite having the largest GDP of any African country, South Africa ranks fourth in terms of the total number of internet connections, behind Egypt, Nigeria and Morocco.

“We are below other African countries when we actually should be the leading African country,” said Matthew Buckland, CEO of South Africa-based, which is focused on tech culture and innovation in the emerging market sector.

According to Buckland, South Africa is an “underachiever” when it comes to internet penetration given the size of its economy, because of the country’s wide gap between rich and poor and the fact that the government has been slow to open up the country’s telecom market.

“We’re a country of economic disparities,” said Buckland. Among the wealthy in South Africa, internet penetration is high, comparable to that of the developed world, but among the poor it is extremely low due to years of apartheid and underdevelopment of a large part of South Africa’s population. “That’s a legacy that we’re still dealing with,” he said.

The lack of competition in South Africa’s telecom market has resulted in sky-high prices for internet and telephone services, but this is starting to change.

The Seacom undersea cable began operating last July, linking South Africa to East Africa, Asia and Europe by a fiber optic line designed to carry 1.28 terabytes per second. Other similar cables that are expected to come online in the next few years will also help to greatly expand the amount of available bandwidth.

Meanwhile, changes in South Africa’s licensing regime has resulted in a flurry of new internet service providers, resulting in more competitive internet packages for consumers.

One service provider last month for the first time began offering unlimited internet access at a relatively reasonable fixed monthly rate — a standard service in Western and Asian countries, but not in South Africa. Usually consumers pay for a pre-determined amount of bandwidth a month that is restricted to a certain amount of local and international internet usage, and are cut off if they exceed the specified amount.

According to Buckland, the internet has until now been a medium for the middle class and elites, and outside the reach of the average South African. “This is all starting to change now,” he said. The country is seeing “incredible growth” in mobile internet, he said. While internet and telephone services are expensive in South Africa, mobile data rates are among the cheapest in the world. Mobile phone penetration in South Africa is close to 100 percent.

“That is an exciting thing for the country because it means that for the first time the web has the potential to become a mass medium, via a mobile device,” Buckland said.

But more users online will also mean that internet crimes will increase in South Africa. Internet security analysts Symantec warned recently that South Africa will see a jump in internet crime linked to the World Cup — which kicks off in the country in June — targeting soccer fans booking tickets and hotels online. This in combination with the increase in new broadband internet users will worsen internet security, according to Symantec.

The company explained in a report that “malicious activity in a country tends to increase in relation to growth in broadband infrastructure. One particular reason for this is because new users may be unaccustomed to, or unaware of, the increased risk of exposure to malicious attacks from such robust connections.”