Government wants to drastically reduce broadband cost

Government wants to drastically reduce the cost of broadband through the introduction of more competition into the tightly regulated market says Communications Minister Dina Pule.

Opening the ICT Indaba Africa Conference in Cape Town on Monday, Pule said most of the new growth in data access could be attributed to the rise in the number of mobile broadband subscribers using handheld devices such as smartphones.

She said that mobile broadband subscribers grew by 31% in 2011 to reach 4.2 million people in SA. “We are however concerned that the broadband prices remain very high, based on purchasing power parity in comparison with some OECD countries such as Mexico, Chile and Hungary,” Pule said.

She said the reduction would be made through a licensing process, during which government would identify capable internet service providers (ISPs) that would make use of radio frequency spectrum to push broadband prices lower.

“These ISPs, big and small, are also expected to offer affordable broadband services to poor South Africans and the people living in rural areas,” Pule said.

Telecommunications regulatory lawyer Dominic Cull described the statement as “serious good news.” Cull said that because more than 42 million people in SA used mobile phones, it was the most efficient way to meet government’s overall intention of getting as many people connected to the internet by 2020, in the cheapest possible way.

“Mobile data is really quite unaffordable for the vast majority of the population. However, by regulating the wholesale part of the market and deregulating the resale side, that will introduce competition and this has proven the best way to bring prices down,” Cull said.

Pule said that government would also be looking at ways to introduce mobile services within the 700MHZ and 800MHZ bands which are normally used for TV broadcasting.

Cull said the International Telecommunications Union had recently determined that those frequency bands that were being freed up by the introduction of Digital TV systems could be used to roll out the next generations of mobile technology.

“What the minister said today could really be good for consumers and the industry, just as long as she is not conflating the infrastructure (frequency) issues with data services,” he said.

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Government wants to drastically reduce broadband cost