Connect Africa: Driving the online highway
21 November 2013
Is your internet connection fast enough? Google's Brett StClair suggests a simple test: go to YouTube and see if you get what he calls "the international sign of poor connectivity" - those rotating flashes of white dots that indicate that a video is loading - or stalling.
StClair was one of the leaders of the African communications industry who met last week in Cape Town. In many ways the African communications industry has never had it so good. Vodacom has just reported record profits of R9.9-billion. More and more Africans are getting cellphones and more and more of them are using the internet. But there was as much frustration as optimism as people debated the challenges of delivering broadband connectivity.
One of the biggest challenges is that investment of many millions of dollars will be needed to build the infrastructure necessary to connect the unconnected and to provide the speeds that users want. As many participants pointed out, the future of the internet in Africa is mobile. Chris Daniels, a senior Facebook manager on his first business trip to South Africa, said that, in his company's view, the next billion users (yes, with over a billion active users, Facebook counts in billions) will very likely depend on a mobile-only experience.
The network operators are struggling with what they call "monetisation". As people move from voice to data, and as they increasingly demand connections fast enough to do things such as watch YouTube videos, the need for infrastructure shoots up and operators have to invest more to provide it - but they also have to lower their data prices.
Google and Facebook earn income from online advertising but the operators don't provide services like theirs. They largely provide the "dumb pipes" on which services travel to and from your computer or phone. So the industry is battling with how to grow and divide the income pie between the operators - who need to invest in infrastructure - and the service providers who generate their incomes on operator infrastructures but don't pay for building it.
Romeo Kumalo, of Vodacom, suggested that, with growing economies in Africa, shareholders are prepared to invest in building the infrastructure that is going to be required. He points out that Vodacom invested around R3-billion in South Africa alone in the six months to the end of September.
He said governments across the continent need to provide an enabling environment if investment is to grow.
"Governments should focus on making spectrum available and at reasonable prices."
Andile Ngcaba, who leads the infrastructure investment company Convergence Partners and is a former director-general of the Department of Communications, agrees that policy matters.
"We are looking for predictability and clarity," he said. Without that you can't invest."
Does government policy in Africa meet that standard? On a scale of one to 10, he said , "we are sitting at three".
Ngcaba sees internet connectivity as a competitive issue for Africa.
"People don't realise that the economy is already very much internet-based. The world's trading platforms, for example, are already all online. Money is getting onto the internet."
Building up the African internet is similar to building highways: the more lanes you build the more traffic comes along to use them.
What everyone acknowledges is that millions in Africa are waiting - to connect faster or to connect at all. As StClair puts it, the issue is not "build it and they will come", but "build it and they are there".
Original article by Indra de Lanerolle
De Lanerolle is a visiting researcher at the University of the Witwatersrand, Johannesburg