Friday, August 27, 2010

The State of the Net: South Africa compared to Korea and Australia

With super wired nations like South Korea and Australia leaving us eating their digital dust, what exactly are South African internet users missing and how can we start to play catch up? – by Nick van der Leek

According to Akamai, a leading provider of cloud optimization services, the global average for internet connections is 1.7 Mbps. During the 1st Quarter of 2010 South Korea achieved average maximum connection speeds of 33 Mbps. Over the same period 96 countries, including South Africa, had average connection speeds below 1 Mbps.

If South Koreans and Australians had to experience the present state of the internet in South Africa they’d probably describe it as belonging to ‘a relatively long time ago in a galaxy far, far away.’

The African continent has an adoption rate of just 11% for Broadband, averaging 944Kbps. Australia has a 44% Broadband adoption rate averaging at 2472Kbps. Asia’s adoption rate is similar to Australia’s at 45%.

Unfortunately South Africa is world’s apart when it comes to our connection speeds, as the following analysis will demonstrate.

Look At What We’re Missing

Looking more closely, hubs like Johannesburg show just 2% of users enjoying medium to high connection speeds above 2Mbps. 40% are using connections of around 768 Kbps and from there the rot sets in. 41% are still stuck at the dinosaur pace of 256 Kbps and 16% are watching the sun go down, waiting for pages to load at speeds slower than 256 Kbps. Cape Town does even worse, with a staggering 70% sweating to slow 256 Kbps connections and 13% turning gray using slower than 256 Kbps. Just 12% of Cape Townians are using 768 Kbps.

In contrast, 65% of Koreans enjoy speeds of 5Mbps or more; 11% access the internet at over 25 Mbps. The city with the world’s fastest connections is Masan. In urban centres around Seoul, such as Goyang, 77% of users are logging on at speeds exceeding 5Mbps. 18% are using 2Mbps and around 1% are using slower connections. These proportions, emphasizing very high speed usage for a vast majority of users, remain constant across all of the Korean Peninsula’s urban centres.

Australia, 50th in the world when it comes to connection speeds, still puts South Africa to shame. Bentley in Western Australia has 66% of its users enjoying speeds greater than 5Mbps, 20% of users are paying for 2Mbps, 8% at 768Kbps and 2% at 256Kbps. Monash in Victoria has similar figures: 80% at 5Mbps, 14% at 2MBps and just 7% using 768Kbps or slower. Not everywhere in Australia is fast paced – Penrith has 50% of its users at the ultra slow end, with 6% paying for the privilege of 5Mbps or more.

How then did these countries get their infrastructure up and running, and what is the everyday benefit to these blistering connections?

PC Bang

A PC Bang is the Korean term for ‘internet café’. Korean internet café’s are a dime a dozen, hangouts for teenagers, businessmen and hard core gamers. They’re used for shopping and socializing. But what exactly does the world leader in internet connectivity and penetration offer the ordinary consumer?

Brian Stepanek, an expat South African currently residing in Ilsan, a satellite of Seoul, says, “I presently manage a server in my apartment that hosts 13 websites on a 100Mbit line. That’s 100Mbit up and down for around $25 to $35. That works out to about R150-R210 for these high speed connections, per month.”

How has Korea managed to make their internet this cheap? “South Korea set a goal of becoming the Trade and business hub of Asia, including the internet hub of the region; accordingly they developed plans 10 years ago to meet this goal. South Korea is uniquely blessed with the twin pillars that make for relatively inexpensive infrastructural outlays: high urban population density and small geographical areas to cover.”

As a result, the Korea dream has quickly become a reality. Stepanek, an Information Systems Services Manager says, “Korea is so densely populated it is affordable for ISP’s to run fibre optic lines to all apartment buildings. Most people don’t even have a DSL modem, they just have a CAT5 network cable coming out the wall.”

Korea sees much innovation coming from their own highly competitive, hugely innovative digital giants – companies such as Samsung and LG.

Stepanek reckons Korea’s “companies keep at the forefront of technology and the consumer reaps the rewards. This keeps internet speeds fast and service efficient. The result for me, the consumer, “he says, “is that I can do more. I can be downloading a file at 2Mb/s and still browse websites without any noticeable lag or slowdown in page loads.”

South Africa has a population about as large as South Korea’s but a landmass ten times the size of Korea? Does South Africa then really have a hope of picking up speed comparable to Korea’s?

Down Under

In contrast to South Korea, Australia is one of the least densely populated countries in the world. In fact Australia is only just slightly less empty than South Africa’s neighbors, Botswana and Namibia. Even so, a large proportion of Australia’s 22 million inhabitants live in cities. In contrast to Korea, however, Australia’s urban centres and suburbs are quite similar to South Africa’s.

What then is ballpark online consumption in Australia? According to advertising executive Sarah Britten, “I ploughed through 14G in 2 months, mainly thanks to YouTube.”

Wayne Steed, an expat South African based in Sydney, offers the following cost perspective. “I initially had two ADSL2+ lines with speeds ranging from 1500Kbps – 240 000 Kbps. What’s strange is that the slower ADSL lines are actually more expensive than ADSL2+.” Steed suggests that this may be to wean consumers off the older technology.

“Pricing models vary substantially. Right now one offer I’ve seen is for a 500GB capped plan from TPG for AU$59 + line rental (Au$21) per month. The catch is that this large cap applies to only offpeak times [02:00 – 08:00]. Another option is a ‘naked’ line. They put the ADSL straight through your house; there’s no line rental.”

Steed scoffs at what South Africans refer to as ‘Broadband’. “There’s nothing broadband about a 512Kbps line,” he says, “and then still having a 6GB cap. My mobile phone cap is larger than that. One of the features ABC [Australian Broadcasting Corporation] offers is a program you install on your computer allowing you to watch episodes over the past month at your own convenience.” Steed also points out that there has been a recent upsurge in ISPs offering IPTV deals “for as little as $30p/m.” This includes “Discovery Channel, 7 new movies a week, movies on demand and several free to air channels. Without decent line speed you’ll never be able to implement this.”

Australia’s Labour Party intends implementing a National Broadband Network [NBN]. Steed says Australia will endeavor “to bring Fiber Optic to 95% of homes, and increase average speeds one hundred fold. This is intended as economic stimulus.” The opposition are opposed to this initiative, projected to cost $43 billion.

And how does all this internet infrastructure impact on one’s lifestyle? “I find since moving to Australia I do a lot more on the internet; I’ve moved large amounts of my personal files and information onto the internet, into the Cloud so to speak. I can now access any of my files from any computer or from my iPhone whenever I need them. Microsoft for example offers a 25GB space for free.”

Steed says caps continue to increase, with prices moving in the opposite direction. “2 years ago I was getting a 50Gb cap for AU$80 per month, now I’m on a 120 GB package for the same price. There is a lot of competition which must be helping the market.”

So how did Australia do it? Do they have a government that it simply a lot more internet friendly than our own? This is perhaps a factor. South Korea too saw the state declare investments in expanding their internet capabilities as a national goal.

The Back Yard

Did Telkom hobble South Africa’s internet prospects ad infinitum? “Australia had a very similar problem to South Africa,” Steed observes. “Over here it was called Telstra; they had a monopoly and they’re still here, but so is the competition, bringing down prices and upping the service.”

What needs to happen, it appears, is for both government and citizens to agree to the economic and employment benefits that arise from wiring up a nation. South Africans must also be realistic in that only around 5 million people [10%] can afford internet connections, and a substantial fraction of the population, perhaps 40% remains mired in poverty. Investments in the internet must be made with these chronic socio-economic disadvantages in mind.

In addition, South Africa can learn and apply lessons from both Korea and Australia. In terms of urban planning, we can develop our living and working arrangements in compact urban and suburban centres mindful of the possibilities that certain operating densities may have on the outlay of internet infrastructure.

In terms of muzzling industry costs, government must stimulate competitors, a process that is comparatively recently underway, and will perhaps now begin to gain traction.

The internet is still evolving. Akamai has measured 487 million Unique ISP addresses during the first quarter of 2010, an increase of 7.2% over the previous quarter. Since South Korea is at the forefront of developments, improving their fastest connections at a rate of 28% year on year, the country should be treated as a model or ‘best possible case’ when conceiving relevant protocols.

From here it is simply a matter of sharing a common cause. This means putting policy and practices in place to realize the potential for local businesses to offer enhanced connections, allowing for faster flows and as a result of these, a more effective and competitive nation as a whole.

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