[By Duncan McLeod]
It’s long been government’s desire to bridge the digital divide, to get communications technology in the hands of the rural poor. But its every attempt to address the problem has failed. Now commercial operators may achieve what government couldn’t.
The late Ivy Matsepe-Casaburri, the former communications minister, had her heart in the right place. She genuinely wanted people in underserviced areas to get access to the latest communications technology.
Unfortunately, her distrust of the free market’s ability to deliver the goods through competition between private operators led her to create a number of poorly thought out schemes to bring access to the rural poor.
First, she tried to get state-owned Sentech, the broadcast signal distributor, to build a wireless broadband network. We all know how that ended.
Then she got the regulator, the Independent Communications Authority of SA, to license a handful of black-owned operators in the rural areas, but stifled them from the start by barring them from offering services in more profitable urban areas. Needless to say, the few that managed to get off the ground haven’t done particularly well.
Matsepe-Casaburri’s initiatives were driven by the idea that the country’s commercial operators would never build infrastructure — particularly broadband networks — in rural areas. But every indication now is that the big ones are gearing up to do exactly that.
MTN SA’s chief technology officer, Sameer Dave, told me last week about a plan the company has hatched to extend its third-generation (3G) mobile network to the country’s rural areas. He said MTN expects eventually to enjoy more demand for its broadband services from SA’s rural areas than from the relatively well-to-do urban market. That’s quite a statement.
It’s worth talking a bit about how MTN plans to target the rural market. It will “refarm” a portion of its bandwidth allocation in the 900MHz band for 3G services. In layman’s language, it’s going to provide wireless broadband in a frequency band that will dramatically reduce costs and expand the coverage area around its base stations.
Dave said MTN plans to extend the 3G network to the rural areas one region at a time. It will start with densely populated areas adjoining the cities, but will expand the infrastructure into more outlying areas, too.
And it’s not the only operator eyeing potential riches in SA’s traditionally underserviced areas. Cell C is building a 900MHz 3G network and it, too, has identified the country’s more outlying areas as a future focus area. Then there’s Vodacom, which is investing in low-cost access devices, like cheap Linux-based netbooks and smartphones, as it tries to expand the number of South Africans using the Internet.
These companies aren’t being altruistic. They see the opportunity to make money by building infrastructure in areas that haven’t traditionally had access to broadband.
And their expansion to new markets is being driven by competition. Cell C is reinventing itself, building an advanced 3G network to try to take market share from its bigger rivals. This, together with the imminent launch of Telkom’s mobile business, is already making the market more competitive.
Bringing high-speed connectivity to the country’s most outlying areas is likely to remain a challenge, however. It’s prohibitively expensive, for example, to extend fibre-optic cables across a country the size of SA.
But it’s encouraging that these are the challenges now exercising minds at SA’s mobile operators. Universal access is not something that will happen overnight, but the commercial operators could go a long way in bridging the divide — and disproving Matsepe-Casaburri’s assumptions about the free market.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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