The Effect of Bandwidth on an Economy
In 2009, the World Bank released a report on the Information and Communications for Development project, which found that access to broadband internet boosts economic growth in all countries, but most noticeably so in developing ones. A Harvard study found that in developing countries, like South Africa, for every 10% of broadband penetration (the amount of the population with broadband internet access) their economies grew by 1.38%.
Not only does internet access effectively lower the cost of communication and expand information flow, but it also extends market boundaries. It is easy to see how an investment in the upgrading of our country’s bandwidth capabilities is not only an investment in economic growth, but also an investment in development.
Bandwidth in South Africa: Where to From Here?
Telkom, the company with the monopoly of South Africa’s phone lines, has thus far failed dismally to provide the country with acceptable internet bandwidth, and charges exorbitant amounts for what little it does provide. Their CEO, Nombulelo Moholi, has herself stated in a recent interview that Telkom needs a ‘culture change’, and that the company is not operating as it should.
The plans that have been put in place to increase internet bandwidth are multiple. Various underground and sub-marine cables have been laid that promise to offer speeds that are comparable to world standards.
However, this does not change the fact that the cost will remain in a similar bracket, unavailable to the rural and disadvantaged sector of the population, and our broadband internet penetration rate will remain near to where it is now – a tiny 2%. However, 60% of Africa’s internet usage still comes from South Africa, which has an overall internet penetration rate of around 11%.
Mobile phones are now also a means whereby one can connect to the internet at speeds that can challenge even fixed-line broadband internet speeds. Now that mobile phones can connect, we may see a sharp rise in people connecting through them, and a dip in traditional broadband usage via desktop and laptop computers.
One thing is for sure: a growth in broadband access in South Africa will strengthen our economy, and as long as it stays so unattainable for so many people, our economy will continue to be strangled.