The health and wealth of
the internet industry
ivo vegter
ict journalist
Wednesday,
8 September 2004
Same old, same old
• with apologies to Bill Watterson and United Press Syndicate
Wednesday,
8 September 2004
Same old, same old
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“Managed liberalisation” has failed
Telkom still a monopoly, 7.5 years on
SNO still not licenced
VANS still not carrying voice
Telecoms costs still unconscionably high
South Africa still falling behind
Foreign investment still zero
Universal service still pie in the sky
Wednesday,
8 September 2004
The status quo
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Internet penetration in SA has barely risen:
Year
Internet users
Population
Penetration
2002
3 100 000
45 129 400
6.8%
ITU
2003
3 283 000
45 919 200
7.1%
World Wide Worx
2004
3 523 000
47 556 900
7.4%
World Wide Worx
Wednesday,
8 September 2004
Source
The status quo
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SA now fourth in absolute terms and last in
growth terms compared to ten peers:
Internet hosts by country
Country
Saudi Arabia
Argentina
Poland
Turkey
Chile
Colombia
Ukraine
Thailand
Malaysia
Iran
South Africa
1998
19
77
24
17
10
9
14
32
122
37
982
594
786
821
173
179
378
269
203
025
2004
15
742
1 296
344
202
115
96
103
107
030
358
766
859
429
158
214
700
971
496
288 633
Change
40
3
1
1
1
1
522%
615%
571%
291%
036%
032%
948%
621%
235%
144%
137%
Countries selected by equally weighting income per capita and GDP
at PPP, and picking those below South Africa
Source: Moneyweb/Mineweb’s Tim Wood
Wednesday,
8 September 2004
Then one day…
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…the Minister woke up…
…and the world as we knew it changed. So did
this presentation.
Wednesday,
8 September 2004
The Big Bang
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“Managed liberalisation” is dead
The DOC did a market study?
The market has been broken wide open
A new golden age for the internet industry
has dawned
Wednesday,
8 September 2004
The Big Bang
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From 1 February 2005:
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Cellular companies may interconnect using non-PSTS
infrastructure
VANS may carry voice over any protocol
VANS may provide network services using non-PSTS
infrastructure
VANS and PTNs may resell spare network capacity
Anyone may apply for a licence to provide payphone services
All other laws, regulations, and licence conditions remain
From 18 January 2005:
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Schools and tertiary institutions will be entitled to 50%
discount on ISP fees, as well as all calls to ISPs
Wednesday,
8 September 2004
Why?
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Should have happened in 2002
Dr Ivy Matsepe-Casaburri reappointed
Her mandate?
Why Roy Padayachee as deputy?
Presidential ICT Task Force
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Presidential International Advisory Council on
the Information Society and Development
Thabo Mbeki ran out of patience?
Wednesday,
8 September 2004
Implications for regulation
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Many existing legal disputes are moot
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New disputes will probably arise
ICASA still needs resources and power
Today’s monopoly complainants will be
tomorrow’s predatory pricing complainants
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Least-cost routing, call-back operators
Competition Commission must look sharp
Policy is finally technology-neutral
The Convergence Bill may well be moot
Wednesday,
8 September 2004
Implications for telcos
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Telkom will change, but remains strongest
Telkom faces hundreds of new competitors
Changes entire SNO proposition, could sue
Big blow to USALs, could sue
Sentech will face serious challenge
Mixed blessing for cellular companies, and
Cell C now more vulnerable than ever
International operators will want to play
Wednesday,
8 September 2004
Implications for ISPs
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ISPs with broadband and VOIP plans at
the ready will prosper
ISPs with access to capital will outperform
Death of dial-up growth?
Telkom, Sentech and SNO will soon
compete to supply international access
Alternative infrastructure suppliers and
self-provisioning will force prices down
Wednesday,
8 September 2004
Implications for customers
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Innovators get to freely compete for
customer spend
Broadband everywhere
Prices will drop, but only gradually
Digital divide can now be tackled
Time-based billing to become obsolete
New services, new applications
Choice, choice, choice – and risk
Wednesday,
8 September 2004
Issues that remain
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Numbering plan, number portability
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Break-in/out and interconnection regulations
International access
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SAT3 and EASSY
Cost impact of bulk-buying-for-resale?
Spectrum allocation
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ENUM, SA ID number, VOIP termination
Tradeability and use-it-or-lose-it regulation would assure
optimum allocation
Local loop unbundling
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Already paid-for by taxpayers, after all
Wednesday,
8 September 2004
Planning for a gold rush
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Technology and supplier neutrality
Converged devices, services
Pay attention to security, QoS, shaping
and prioritisation
Simplicity in both products and pricing
Affordability: be innovative to reach new
markets
Think local: prepaid, wireless local loop
Wednesday,
8 September 2004
Planning for a gold rush
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Don’t be fooled about low barriers to entry
Don’t think Telkom won’t adapt handily
Exploit niche opportunities
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Exploit new opportunities
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Offshore call centres and BPO
Local language services
Regional information services
Move carefully, don’t get trampled
Wednesday,
8 September 2004
IT’S BOOM TIME!
thank you
ivo vegter
ict journalist
Wednesday,
8 September 2004