This is the key finding of the Internet Access in South Africa 2010 study, conducted by World Wide Worx and jointly sponsored by Cisco. The headline data, released today, shows that the Internet user base grew by 15% last year, from 4,6-million to 5,3-million, and is expected to grow at a similar rate in 2010.

“The good news is that we will continue to see strong growth in 2010, and we should reach the 6-million mark by the end of the year,” says Arthur Goldstuck, MD of World Wide Worx

“A sustained growth in Internet penetration is a key factor that will positively influence the economy of South Africa”, says Reshaad Sha, Senior Manager for Cisco Internet Business Solutions Group. “The varied range of application services and social networking platforms used by local consumers has fuelled the uptake that we see today.”

Growth in the number of Internet users in South Africa was relatively stagnant from 2002 to 2007, when it never rose above 7%. However, this rate almost doubled in 2008, and continued accelerating in 2009.

World Wide Worx found that the landing of a new undersea cable on the South African coast was only one of a range of factors behind the growth. Of greater significance was the granting of Electronic Communications Network Service licenses to more than 400 organisations. This meant that service providers that were previously required to buy their network access from one of the major providers, could now build their own networks or choose where they wanted to buy their access.

The result was that a market previously characterised by a limited range of providers and services suddenly exploded as small providers were able to repackage the services provided by the large telecommunications corporations in any way they wished. The large providers, in turn, began to offer far more competitive packages to both customers and resellers.

World Wide Worx found that a second key factor in growth over the past two years has been the continued uptake of broadband connectivity by small and medium enterprises migrating from dial-up connectivity. Each company moving from dial-up to ADSL, for example, extended Internet access to general office staff. This process was found to add an additional one to 20 new users to the Internet user base for every small business installing ADSL.

While the headline findings examine the general numbers of users, the final Internet Access in SA 2010 report, due to be released in March, will highlight the extent of new fibre-optic networks laid down across South African cities and between the cities. It will also examine the impact of the range of new undersea cables that will be in place by the end of 2011, and which is expected to enhance competitiveness even further.

“In the coming year, operators will begin to leverage the combination of new undersea cable capacity and new fibre-optic networks to supply corporate clients and resellers with bigger, faster and more flexible capacity,” says Goldstuck. “Almost every large player in the communications industry has realigned its business to take advantage of this relentless change.”

“South African consumers and businesses are demanding access to online applications and services that can only be experienced via high speed connectivity, such as fibre-optic networks. The year ahead will see the proliferation of high speed connectivity materialising more widely than ever before”, says Sha. - 14 January 2010

For more information, please contact:

Arthur Goldstuck
MD, World Wide Worx
Tel: +27 11 7827003
Or click here to send an e-mail.

Kim Hunter
Text 100 Public Relations
Tel: +27 11 803 2800
Or click here to send an e-mail.

The independent technology market research organisation was the first to bring public attention to the high cost of interconnect rates – formally known as the mobile termination rate – through its annual Mobility research project four years ago. It initiated the campaign to bring down the interconnect fee in 2005, and published a petition against the high interconnect rate 2006.

“It’s been a long time coming, but it’s never too late,” said World Wide Worx MD Arthur Goldstuck. “We welcome the announcement, and believe it is a first step towards more affordable communications. There is still a long way to go, and there are many obstacles to be overcome, but Minister of Communications Siphiwe Nyanda has demonstrated the kind of political will that is needed to address these obstacles.

“We also welcome the willingness of the mobile networks to make a meaningful cut in the interconnect rate, and trust that this heralds the beginning of a new approach towards the concerns of the consumer.”

Goldstuck warned, however, that the rate cut will have little impact if the networks are not required to be transparent regarding the cost structure to the consumer.

“Under the current structures of call packages, it is almost impossible for the consumer to understand the cost components of various categories of calls, and this is clearly an area of potential confusion and disinformation. Across both mobile and fixed line networks, consumers need to be able to see, for each category of call, such as off-peak and peak-time, to mobile and landline numbers, what amount is made up by the interconnect fee.”

World Wide Worx has pointed out that the interconnect fee could still come down to as low as 30c. In their 2006 book, “How to buy a cellphone in South Africa,” Goldstuck and Steven Ambrose of WWW Strategy published the first petition to bring down the interconnect rate, and invited readers to lodge their objections with both the Minister of Communications and Icasa. However, the call was ignored by the authorities until hearings into the issue were held two years later. Only in 2009, however, when the matter was raised in Parliament by Independent Democrats leader Patricia de Lille, did the Government step in.

“The cut of the peak interconnect rate from R1.25 to 89c is a small victory, but it is just the start,” said Goldstuck.

World Wide Worx has issued a priority list of further areas that need attention regarding the cost of communications in South Africa:

• Clear evidence of the real cost of terminating calls from one network onto another. Extravagant claims have been made, but no network has been willing to play open cards on the issue. It has been argued that the real cost may be a few cents, and it is important for both transparency and affordability to clear up the confusion;
• Transparency of the makeup of call costs to the consumer. This is essential for cuts in specific areas to be visible;
• Investigation of the requirement by all mobile networks for compulsory caller line identity and itemised billing on all contract accounts, both of which incur a cost to the customer. These do not apply to pre-paid accounts.
• An examination of high line rentals for fixed line users, and of a requirement by the incumbent fixed line provider for its customers to pay a high deposit fee, which is then held indefinitely or until the account is terminated.

“Fixed line costs should not be immune from the scrutiny of Government,” Goldstuck noted. - 12 November 2009

This was one of the key findings from the consumer phase of the Mobility 2009 research project, released today by leading market research organisation World Wide Worx. The study was backed by First National Bank (FNB), leaders in cellphone banking in Africa, and Research In Motion (RIM), the company behind the BlackBerry solution.

“It is encouraging to see that not only in FNB, but across the country, cellphone banking is now part of people’s lives,” says Len Pienaar, CEO, FNB mCommerce.

The Mobility 2009 study is being conducted in four phases, with the first three looking at the use of mobile technologies by Small and Medium Enterprises (SMEs), Consumers and Corporations, and the final phase exploring the Mobile Internet.

In the second phase, announced at a press conference today, it was revealed that, while 16% of banking customers in South Africa use the internet for banking, 28% use their cellphones. A total of 34% of banking customers use one or both of these channels. Outside of the branch and ATMs, only 6% relying exclusively on the internet, while 18% rely only on cellphone banking.

“The fact that services like cellphone banking are taking off so strongly shows that consumers no longer see their cellphones only as voice and text messaging devices, but use them stay in touch with everything that matters in their business and personal lives,” says Deon Liebenberg, Regional Director for Sub Sahara Africa at RIM. “With a device like a BlackBerry smartphone, you have immediate access to financial information, your accounts and banking services while you are on the go, wherever you are.”

The study revealed that the main services driving cellphone banking were balance enquiries and notifications of transactions, with three quarters of cellphone bankers using these features. Just under half view statements on their cellphones, 35% transfer between accounts, and 28% pay accounts on their cellphones. In contrast, only 8% add beneficiaries via the cellphone, indicating both security concerns and set-up issues.

“Our research shows that South Africans are becoming comfortable with cellphone banking, but precisely half of general banking customers are still nervous of it, citing trust as their major concern,” says Arthur Goldstuck, MD of World Wide Worx. “However, this concern must be seen in the light of 34% also saying the issue is not knowing how to use the service.”

“Although we have made great inroads, two-thirds of banked people still don’t use electronic channels, other than an ATM,” says Pienaar.

At the same time, two thirds of cellphone banking users were satisfied with the security of the channel. This suggests that, once customers start using cellphone banking, they grow increasingly confident in both security and usability aspects.

“We have seen this rapid adoption driven by our USSD menu service, although I believe that WAP will start to play a more important role in future,” says Pienaar.

Liebenberg adds: “The success of cellphone banking shows that there is a strong demand in South Africa for powerful and easy to use mobile data services and applications that help people to save time and stay in control of their lives at all times. With mobile penetration at more than 114% in South Africa, we can expect to see the adoption of mobile banking and other personal services and applications ramp up quickly.”

The study also shows purchasing via the cellphone beginning to take off, with 24% of cellphone banking customers purchasing prepaid electricity and 21% making general purchases like movie tickets and flowers. Purchase of airtime still leads the way here, accounting for 61% of cellphone banking users.

Mobility 2009 included research among 1,000 consumers in metropolitan areas, 1,000 SMEs and 240 large enterprises in South Africa. - 3 November 2009

In a nutshell:

Services driving cellphone banking:

• Balance enquiry: 74%
• Notifications: 73%
• Buying airtime: 61%
• Statement/mini-statement: 48%
• Notification of account limit: 47%
• Transfer funds between accounts: 35%
• Pay accounts: 28%
• Buy pre-paid electricity: 24%
• Make a purchase: 21%
• Add beneficiaries: 8%

Contact

For more information, contact:

· Virginia Magapatona, FNB, Head of Corporate Communications, on + 27 (0) 11 371 9330 or + 27 83 257 2777 or by e-mail on VMagapatona@fnb.co.za

· Christa Botha, Corporate Communications: Sub-Sahara Africa Research In Motion, on +27 82 562 5264 or by e-mail on cbotha@rim.com

• Arthur Goldstuck, MD, World Wide Worx, on +27 11 782-7003 or by e-mail on arthur@worldwideworx.com

This is a key finding from the Mobility 2009 research project being conducted by World Wide Worx and backed by First National Bank (FNB), leaders in cellphone banking in Africa, and Research In Motion (RIM), the developer of the BlackBerry solution.

“The findings of this survey demonstrate clearly that small business owners attach a high value to the benefits of staying in touch with clients and colleagues at all times, wherever they are,” says Deon Liebenberg, Regional Director for Sub Sahara Africa at RIM. “Dependable, easy-to-use and high-quality mobile solutions pay for themselves quickly by enabling small businesses to be more responsive, efficient and productive, and allowing them to do more with fewer resources.”

The Mobility 2009 study is being conducted in four phases, with the first three looking at the use of mobile technologies by Small and Medium Enterprises (SMEs), Corporations, and Consumers, and the final phase exploring the Mobile Internet.

In the first phase, announced at a press conference today, it was revealed that SME owners and decision-makers consider a range of other factors before price enters the picture for purchase decisions. For no less than 80% of the businesses surveyed, Ease of Use was an important criterion, while 79% rated Quality as important. Maintenance and Reliability were a little further behind, with 74% and 72% of respondents respectively rating these as important.

Only then, and in a distant fifth place, came Price, with only 64% of respondents rating it as important. At 52%, the least important criterion for SMEs was Company procurement policy – largely because most SMEs don’t have a formal policy.

“Whether you are designing a phone or a cellphone banking service, ease of use and consumer education are critical for users,” says Len Pienaar, CEO, FNB`s Mobile and Transact Solutions.

“These findings explain why many seemingly valuable and useful technologies, tools and applications are not embraced by SMEs,” says Arthur Goldstuck, MD of World Wide Worx.

He points out that, while marketing campaigns for cellphones in South Africa have traditionally relied heavily on the power of brands, the survey shows that brand loyalty is no longer a factor in the mobile market. Only 55% of respondents rated Brand Loyalty as important, which in itself would be significant, but becomes largely irrelevant in contrast to other factors.

“This suggests that the mobile arena is about to undergo fundamental changes in market structure and dynamics,” says Goldstuck.

Liebenberg adds: “For smaller businesses with limited resources, the business benefits of being in touch with clients and other business stakeholders are perhaps even more important than they are for their larger competitors. Yet, since they don’t have resources and time to waste on managing, supporting and training for complex solutions, small businesses demand that their mobile devices be reliable and rich in functionality as well as simple to deploy and use.” - 15 September 2009

• To download the executive summary in Word format, please click here. It includes methodology, contents list and ordering information.

Their sponsorship will make it possible to uncover the most significant trends shaping smartphone usage, mobile technology, mobile commerce, the mobile Internet and cellphone banking in South Africa. The Mobility project is respected in the mobile industry for its in-depth research into mobile trends across the corporate, SME and consumer sectors.

“The research will assist in amplifying investment opportunities in the technology, says Len Pienaar, CEO, FNB`s Mobile and Transact Solutions. “In South Africa, cellphones have become the most easily accessible and convenient way of offering services to remote areas, and an understanding of cellphone usage and trends is necessary to leverage the technology effectively.”

“The findings of the preliminary research for the annual Mobility survey confirm that South Africa’s cellular market continues to enjoy robust growth, even with market penetration at around 100%,” says Deon Liebenberg, Regional Director for Sub Sahara Africa at RIM.

“Our own experience reflects that it is not only the number of cellular connections that is growing, but also the applications for which subscribers are using their smartphones. Mobility is changing people’s personal and business lives by allowing them to stay in touch with information, applications and other people wherever they are.”

Preliminary research for Mobility 2009 was based on analysis of Government and institutional data, as well as personal interviews with key role players in the cellular sector, including network operators and wireless application service providers.

The research shows that the average number of SIM connections, or active cellphone accounts, per cellphone user in South Africa began to grow steadily after pre-paid accounts were introduced in 1996. It grew from an average of 1 SIM card per phone user in 1997 to 1.2 per user in 2003 and to 1.47 per user at the end of 2008. The gap between users and connections is expected to continue to grow as both consumers and businesses find more innovative approaches to cellphone usage.

“This gives the impression that every South African has a cellphone, but that is obviously not possible,” says World Wide Worx MD Arthur Goldstuck, who is leading the Mobility 2009 project. “It’s become clear that many pre-paid users have a SIM card for each major network, to avoid incurring the interconnection fee charged for calls between networks. The low cost of new SIM cards – as little as 50c for a starter pack – also gives anyone the ability to have more than one number.”

The interconnect fee adds R1.25 to the cost of every call, and has prompted new approaches to cellphone usage in South Africa. Mobility 2009 will also reveal further innovative approaches taken by both consumers and business users to make their cellular lives more effective.

“Cellphone functionality has progressively grown beyond the traditional voice and SMS. With the growing trend towards cellphone banking, mobile media, mobile marketing and mobile internet access. In-depth understanding of consumer perceptions and trends is critical in addressing the needs of the consumer,” says Pienaar.

“RIM looks forward to seeing further findings from Mobility 2009. The research should paint an interesting picture of how people and businesses in South Africa are using their smartphones to be more productive and efficient,” says Liebenberg. “It will be particularly interesting to see what the latest trends in the mobile Internet space are. We believe that there is a massive opportunity to bring mobile Internet services to more of the country’s people through affordable pre-paid services.” - 3 July 2009

Contact

For more information, contact:

• Virginia Magapatona, FNB, Head of Corporat e Communications, on + 27 (0) 11 371 9330 or + 27 83 257 2777 or by e-mail.
• Christa Botha, Corporate Communications: Sub-Sahara Africa Research In Motion, on +27 82 562 5264 or by e-mail.
• Arthur Goldstuck, MD, World Wide Worx, on +27 11 782-7003 or by e-mail.

In partnership with World Wide Worx and e.tv, the Dreamfields Project will host a schools soccer tournament, or DreamEvent, at Orange Farm, where the project first began in 2007. Three schools will each be presented with a DreamBag, which provides a team with a complete set of kit, including boots and “everything a team needs to walk out onto the field, ready to take on the world”, says project founder John Perlman. “The sponsors, via their investment in DreamBags, are helping us to grow dreams.”

Aside from teams playing under the banners of World Wide Worx and e.tv, a team will also be sponsored by Gadget.co.za, World Wide Worx’s consumer technology magazine, which is celebrating its 12th year as South Africa’s leading online hi-tech publication. Gadget.co.za has focused strongly on coverage of soccer-related hi-tech news in the run-up to the Confederations Cup in South Africa this June and next year’s World Cup finals.

“We’re a soccer-mad organisation, and could think of no more appropriate way to give something back to the community,” says Arthur Goldstuck, MD of World Wide Worx, South Africa’s leading independent technology market research organisation.

The Dreamfields Project also works in partnership with the Department of Education and together they have staged 40 schools tournaments known as DreamEvents, where DreamBags are handed out to all the schools in a particular town or district.

The Orange Farm school teams that will receive their DreamBags on Wednesday are the under 12 teams of Podumo Primary, Lesedi la Kreste Primary and Ahanang Primary. They will vie for a trophy that will be jointly presented by World Wide Worx and e.tv.

“The tournaments are fantastic events — the joy of the children and the deep satisfaction of the donors mixing together in a day filled with football and positive feelings,” says Perlman.

Says Michelle Kirby, e.tv Head of Marketing and Corporate Social Investment: “e.tv are very proud to be associated with a project that not only provides for our young budding soccer stars now, but that will take them to 2014 and beyond,”

Two major corporate sponsors, Old Mutual and BHP Billiton, have covered the running costs of the Dreamfields Project, so that sponsors of DreamBags are assured that every Rand donated goes to the young footballers.

Wherever possible, the Project buys services and goods from local entrepreneurs so that the DreamEvent puts something back into the host community and deepens commitment to the ongoing soccer leagues that education officials will continue to run.

The Dreamfields Project is also committed to finding low-cost low-maintenance solutions to field building, especially in areas where water is a scarce and unaffordable resource. So far, it has built seven soccer fields in rural areas.

The May 27 Dreamfields tournament will take place at the Chris Hani Sports Complex, 15752 Ext 4, Orange Farm, Johannesburg. - 25 May 2009

• For more information on The DreamFields Project, visit www.dreamfieldsproject.org

• To read Gadget magazine, visit www.gadget.co.za

The Internet Access in South Africa 2008 study, conducted by World Wide Worx and supported by Cisco Systems, shows that international bandwidth available to sub-Saharan Africa was a mere 80 Gigabits per second at the end of 2008. This was split between the Telkom-controlled SAT3/SAFE cable and the West African Atlantis-2 cable.

But, according to the report, the capacity will rise to around 10 Terabits per second by the end of 2011, or 120 times the 208 capacity. This growth will be the cumulative result of the existing SAT3 cable being upgraded, three major new cables becoming operational this year, another two in 2010, and the WACS cable in 2011.

These figures exclude capacity available to North African countries that have access to a network of cables criss-crossing the Mediterranean.

Says Reshaad Sha, Senior Manager of Cisco’s Internet Business Solutions Group, “It is encouraging to witness and be part of the telecommunications revolution that Africa is currently undergoing. The role that the undersea cable operators will play is crucial to both the developmental and economic agendas that have and are being set by African Governments.”

The confirmed new cables due to serve West, East and Southern Africa are:
SEACOM, East and Southern Africa, 1.28Tb/s – Due end June 2009
GLO-1, West Africa,640 Gb/s, ready for operations, 2009
TEAMS, East and Southern Africa, 120Gb/s – Due September 2009
EASSy, East and Southern Africa, 1.Tb/s – Due June 2010
MainOne, West Africa, 1.92Tb/s, due 2010
WACS, West and Southern Africa, 3.8Tb/s, Due 2011

“The WACS agreement puts in place the final spark for the broadband revolution that is about to sweep Africa,” says Arthur Goldstuck, MD of World Wide Worx. “The real significance of all these undersea cables is that they will in turn lead to further infrastructure expansion to bring this bandwidth to end-users, especially in the business world.”

Cisco’s Sha concurs: “The telecoms operators and governments are still required to fulfil the role of delivering this connectivity to their citizens. This will probably be the most challenging role in realising the benefits of the terabits of bandwidth that will be reaching the African coastlines.”

The Internet Access in South Africa 2008 report includes an overview of each of these cables and a timeline for their implementation. Download the executive summary here.

8 April 2009

The first formal web site benchmarking survey of South African political parties was released today by World Wide Worx, which uses its Webagility system to evaluate and benchmark web site usability and strategy of companies, organisations and institutions in South Africa and globally.

The Webagility system breaks the analysis down into several modules, including usability, social media, campaign effectiveness, and content strategy. Each module contains up to 30 micro-elements, which are each assigned a score, providing a detailed measure of overall effectiveness of online presence. Webagility has been used to analyse sites for clients as diverse as major retailers, banks, bookstores, the City of Jo’burg, SA Revenue Services, the SA Institute of Chartered Accountants and Wits University.

“The DA site achieves only an average score from a usability point of view, but their content strategy sets them apart,” says Steven Ambrose, manage director of WWW Strategy, which conducts the Webagility analyses on behalf of World Wide Worx. Ambrose heads up the Webagility team of analysts. “Benchmarked against global best practise, the DA scores 81% on content strategy, against 64% by the ANC and 60% by COPE.”

In usability, the DA score drops to 69%, while the ANC is consistent at 63% and COPE drops to 57%. Campaign effectiveness sees similar ratings for the DA, at 65%, while the ANC scores only 48%, COPE 45% and the UDM comparing well with these at 43%.

The much vaunted use of social media like blogging, Facebook and YouTube by the political parties is revealed by the analysis to lag behind global best practise. While the DA still leads substantially here, its benchmarked score drops to 69%. The ANC plummets to 47% and COPE 43%.

“The difference lies not so much in what they are doing, but in how they are doing it,” says Ambrose. “The ANC have clearly invested heavily in their online presence, and their YouTube site looks most impressive at first sight. But it is put to very poor use, with uninspiring content, and little opportunity for voter engagement. The DA, on the other hand, has spent less money on the Internet, but scores far higher due to the direct engagement of its own representatives. Their blogs are not only relevant, but interesting, so it comes across as real engagement rather than a public relations exercise.”

The overall Webagility scores of the major parties, benchmarked against global best practice, are:
DA: 76%
ANC: 61%
COPE: 56%
UDM: 43%
ID: 32%
IFP: 23%

“The poor performance of the IFP web site, which our system characterises as ‘potentially damaging’, is a reflection of the reality that the IFP does not expect its target voter audience to be found among Internet users,” says Arthur Goldstuck, MD of World Wide Worx. “It is probably not vote-effective for them to spend too much energy online. The ID’s performance is more a reflection of poor understanding of online strategy, with its leader famous for her attacks on blogs.”

Goldstuck adds that the DA has clearly done its homework on the Obama campaign in the USA, which set the standard globally for embracing the Internet in political campaigning.
Says Goldstuck, “We have nothing like that kind of sophistication in South Africa, but lessons are being learned fast.”

A PowerPoint presentation (in PDF format) summarising the Webagility analysis can be downloaded
here (size of download: 1MB).
7 April 2009

Among the hoaxes included in the study were:

Entire Internet to be rebooted today at 11.59 UTC
2010 World Cup stadiums grass disaster (video news clip)
Charlize Theron coming back to SA to star in soapie
Opera cellphone browser introduces phone control by facial expressions
Guardian to stop printing, moving to Twitter
YouTube provides upside-down video viewing
Computer virus claims human victim
DA leader to perform at CT International Jazz Festival
Cable theft delays SEACOM undersea cable
Emmarentia Dam to be renamed Mbeki’s Dam (video news clip)

* Compound April Grit-your-teeth Rate

1 April 2009