South Africa’s Low Internet Penetration Explained

VENTURES AFRICA- A new study conducted by Arthur Goldstuck of World Wide Worx in collaboration with Google South Africa, has revealed why South Africa is behind in Internet Access.
The study, which was conducted to measure the size of the Internet economy in South Africa, attributes the lack of infrastructure and high cost of broadband as the major cause of the set back.

Goldstuck posits that from his findings, about twenty percent of formal small business and medium enterprises cannot exist without their websites.

“We measured the impact of Internet use on small businesses and we were able to show that something like 410-thousand small businesses have got websites in South Africa. And, of those, 150,000 wouldn’t be able to exist as businesses, without those websites. So that gave us a very important insight into the impact of the Internet economy on small businesses and on employment in this country,” he said.

South Africa is Africa’s leading economy with about 50 million people. However, the research revealed that despite this mass population, only 8.5 million are actively using the Internet. This figure is slightly higher than the 6.8 million accounted for last year.

The high figure recorded this year was attributed to the wave of smart phones usage, which brings the number of Internet penetration in the country to seventeen percent.

“The figure we came up with was R59-billion ($7 billion) as the value of that economy. And, we then equated it to a sector of the economy in terms of impact of GDP. And, the percentage we came up with was 2 percent of GDP. So the Internet economy in SA represents 2 percent of South Africa’s GDP.”

Comparing Internet penetration statistics on the continent, South Africa is behind Nigeria that has a high Internet penetration at twenty-nine percent. Kenya and North African countries are also ahead of South Africa, Goldstuck says.
At the moment, only 9.6 percent of African residents are web- active compared to sixty-five percent of those living in Europe.

“There are two major differences between the countries that are ahead of South Africa and South Africa itself – cell phone penetration and the use of the Internet on cell phones. So, if you look at Egypt and Nigeria in particular, it’s purely a function of their population size. So, as that population embraces cell phones and then the Internet on cell phones, it’s natural that their connectivity base would shoot ahead of SA’s. … The truth of the matter is that the quality of their Internet access is far poorer than your average South African user’s,” he said.

Goldstuck posits that governments’ attitudes towards the importance of Internet access play a big role.

“… Particularly in countries like Morocco and Tunisia you see it at play, also Indian Ocean islands like Mauritius, you see a far greater eagerness from regulators and government itself to have technologies rolled out, to bring communications to the widest possible range of people, as opposed to looking after vested interests. And, it’s those vested interests, or policy interests that tend to hold us back. It becomes a political process, instead of a technology and licensing process,” Goldstuck said.

With the importance of Internet access to small businesses highlighted, Goldstuck says a number of recommendations have been made to South African government on how to possibly boost the country’s Internet economy.

Goldstuck implore the South African government to hasten regulatory process.

In addition, it is expected that the arrival of an undersea fiber-optic cable, which has about 11 landing points in Africa, will address some of Africans’ Internet access problems.