Broadband in South Africa the roadmap to growth

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Broadband in South Africa the roadmap to growth

  1. 1. This document is offered compliments of BSP Media Group. www.bspmediagroup.com All rights reserved.
  2. 2. Broadband in South Africa: The Roadmap to Growth Africa Com 2013 Carel Booysen Executive: Business Broadband Portfolio
  3. 3. Agenda 1. The effect of broadband and the Internet on innovation and growth 2. How does South Africa rate on innovation? • Infrastructure • Human capital 3. Challenges of Broadband in South Africa 4. National Broadband Policy 5. Public and private sector partnerships 6. Telkom response 7. Human capital and personal digital readiness 8. Digitisation trends and the future
  4. 4. Why the Internet and Broadband transformed innovation 1. Enable access to a global platform of knowledge that accelerates and enables further invention and innovation • Best and brightest ideas • Known to billions of people • “Global knowledge bootstrapping” 2. Exponentially increase the ability of people to create, exchange, debate, ideas and knowledge – the building blocks for innovation • Debate and paradigms can spread around the world in days • Viral spread of the best views and ideas 3. Paradigms that made mobile technology accessible to the developing world, like prepaid, can be used to address other critical development needs • Mobile payments • Prepaid electricity Source: Global Innovation Index 2012, Chapter 9
  5. 5. Correlation of Fixed Broadband Penetration and Country Competitiveness
  6. 6. The Internet globally creates more SME jobs than it destroys Source: McKinsey, 2011
  7. 7. SMEs using Web technologies extensively are growing more quickly
  8. 8. South Africa’s ranking on Global Innovation Index Overall ranking: 58th out of 142. Factor (out of 84) ICT access ICT use 86th Government’s online service 81st 79th Pupil-teacher ratio, secondary Human Capital 86th E-participation Infrastructure RSA Rank 107th Tertiary education 141st Gross tertiary outbound enrolment 135th Source: Cornell University & INSEAD, 2013
  9. 9. The challenge of Broadband in South Africa: Speed & Performance Coverage Affordability 2013/11/14 8 © Telkom 2013 | COO MyBroadband Conference 2013 | COO
  10. 10. Economic vs Geographical Challenge: <2% of SA’s area concentrates 50% of population and 77% of national income Low income areas Low-mid income areas Mid income areas Mid-high income areas Johannesburg and Pretoria South Africa Lesotho Cape Town Note: 1Based on census information from 2007 • Mid and high income areas are highly concentrated in few urban and suburban areas • 59% households represent 83% of total income • Value and Population concentration make the case for infrastructure roll-out very challenging Source: Telkom Internal 2013/11/14 9 9 © Telkom 2013 | COO MyBroadband Conference 2013 | COO High income areas
  11. 11. Internet Access: SA vs. OECD Source: Digital Media and Marketing Association, South Africa Source: World Bank, Eurostat, DMMA x SA has less than half the relative internet access than the OECD average (±75%)  But there has been a recent acceleration and the gap will close as OECD saturates and new technologies proliferate in SA
  12. 12. Government’s broadband and ICT aspiration Government’s stated commitment is to achieve 100% broadband access and 1 million linked jobs by 2020 • SA places 70th in the WEF ranking of 144 countries on Broadband readiness • Increasing broadband can have a material impact on economic growth. The World Bank estimate that 10% increase leads to 1-1.4% increase in GDP. • If done effectively, broadband penetration could have major impact on productivity, growth, and employment. • National Broadband Policy: South Africa should have a target of universal broadband, offering a minimum download speed of 100Mbit/s to four-fifths of the population, by 2030 • Icasa is required “to ensure the rapid assignment of high-demand spectrum required to extend the wireless component of the open-access broadband network by mid- 2014”.
  13. 13. Public and private sector partnerships are critical  But also diverse Interests Diverse strengths  Public Sector – Legitimacy, strategic agenda, ability to align various levers of influence; different ROI criteria, some delivery capacity  Private Sector – Delivery capacity, innovation, technical know-how  Public Sector – Policy Objectives & socioeconomic development  Private Sector – Commercial Objectives & ROI for Shareholders The Digital Divide Private sector ROI attractive: prevailing regulation/policy effective Private sector ROI often very long term - Investment stimulation & incentives helpful Private sector ROI unattractive. PPPs drive progress 12
  14. 14. Telkom’s key network transformation focus areas Technical testing FTTH (100+ Mbps) FTTC (up to 40 Mbps) Local Exchange Upgrades (10 Mbps) LTE Access and Satellite repositioning Improved Aggregation and better Customer Experience Access Agnostic Core and IMS capability Evolved from Gbit/s to Tbit/s with enhanced resilience and manageability World wide reach with superb capacity and resilience 2013/11/14 13 © Telkom 2013 | COO MyBroadband Conference 2013 | COO Building a Service Oriented Architectur e (SOA) for NG Products and Services State of the Art Network Operations Centre
  15. 15. South Africa’s ranking on Global Innovation Index Overall ranking: 58th out of 142. Factor (out of 84) ICT access ICT use 86th Government’s online service 81st 79th Pupil-teacher ratio, secondary Human Capital 86th E-participation Infrastructure RSA Rank 107th Tertiary education 141st Gross tertiary outbound enrolment 135th Source: Cornell University & INSEAD, 2013
  16. 16. What influences personal digital readiness? Hypothesis Possible Measures Access We need digital access to become familiar with and engage with the digital realm. Access includes connection, device and affordability % Population (or Staff) with access to the Internet Age “Youth” or “Gen-Y” are overwhelmingly more comfortable, participative and productive in digital environments % population or customer base or staff 24 years old or younger More educated people are more able to engage with and adapt to digital worlds % customer base or staff with at least secondary education* Education/skill * Considered Literacy but too broad; HDI but includes inappropriate factors
  17. 17. Secondary School + Not completed Secondary School Education/skill Level A Possible Model for Personal Digital Readiness Pace-setters Cautious Rationals With Access Digitally Disempowered Hopefuls ≥ 25 Yrs ≤ 24 Yrs Age
  18. 18. Broadband and the Internet enables digitisation trends underpins Digitisation Change in Competitive Imperatives 17 Big Data Broadband and Internet Digital and social media Mobility & UC
  19. 19. Some Gartner predictions for the future • By 2020, the labour reduction effect of digitalization will cause social unrest and a quest for new economic models in several mature economies. • By 2017, over half of consumer goods manufacturers will employ crowdsourcing to achieve fully 75% of their consumer innovation and R&D capabilities. • By 2020, enterprises and governments will fail to protect 75% of sensitive data, and will declassify and grant broad/public access to it. • By 2020, the majority of knowledge worker career paths will be disrupted by smart machines in both positive and negative ways. • By 2020, consumer data collected from wearable devices will drive 5% of sales from the Global 1000 companies Source: Gartner Group, 2013
  20. 20. www.reallyfast.co.za 2013/11/14 19 © Telkom 2013 | COO MyBroadband Conference 2013 | COO © Telkom 2013 | COO MyBroadband Conference 2013 | COO

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