World Dialogue on Regulation

The first draft report has been completed by the LINK Centre as part of the "African E-Index: Understanding supply and demand by measuring ICT access and usage" topic of WDR's third research cycle.

Among its key findings, the South African 2004 e-Index survey shows that there is considerable evidence to suggest that the protectionist policies that accompanied the privatisation of the national telecom operator have not served the country well and while they allowed for the maximisation of state assets this occurred at the expense of the ICT sector and indeed the national economy.

The draft report and a summary of key findings are available on the WDR website.

South African E-index:  Key Findings

The South African 2004 e-Index survey was conducted as part of a broader African-wide study of household and individual usage of ICTs in ten African countries. It evolved out of two baseline studies conducted in 2003. The first, the ICT Sector Performance Review attempted to measure the sector outcomes of policy and regulatory strategies against national ICT objectives for various countries. The second, the Fair Access to ICT Report (FAIR) sought to assess Internet penetration against cost of services and regulatory environments. Both studies were seen as precursors to the E-access & Usage Index.

The paper concludes that there is now considerable local evidence to suggest that protectionist policies emerging from the privatisation of Telkom have not served the country well and while they allowed for the maximisation of state assets this occurred at the expense of the ICT sector and indeed the national economy. The household survey confirmed broadly accepted statistics around the relatively low household penetration rates for communication services in South Africa, with access to fixed lines at 22%. Significantly, of the 32% of the population with mobile phones, 14% also have access to a fixed phone, suggesting that while mobile telephony offers convenience and additional utility it has only extended access to a further 18% of the population. While this is significant, more than 68% of the population continues not to own phones. In this regard South Africa compares poorly with other lower middle income countries in this regard. Household penetration of fixed and mobile services in Poland (31 and 45% respectively) and Turkey (36 and 39% respectively) are well above South Africa (22 and 32% respectively).

And while the survey indicates that South Africans value communications services and are willing to pay an extraordinarily high price for them - in fact over 8% of household income compared to international averages of around 3% - pricing clearly remains an inhibiting factor both with regard to ownership and usage. Although respondents generally indicated that the pricing of services was acceptable, responses to other questions suggest that this may reflect a lack of consumer awareness rather than satisfaction. For example, 36% of respondents who no longer had a fixed phone indicated that the reason they no longer had it was because they could not afford it. Even with mobile services although respondents said the price of services was reasonable the primary reason they gave for not using mobile services more was the price of services.

However, despite the huge impact made by mobile cellular telephony, the number of fixed lines will continue to be an important developmental measure – because fixed-line connections offer more affordable capacity. This is especially true for access to the Internet, because the relatively high cost of GSM mean that it is not currently viable for full Internet connectivity. Without this policy perspective it is possible that a new digital divide will develop, between those with access to data services and those without.