Streaming issues? Report here
Africa Melane 2019 1500 BW Africa Melane 2019 1500 BW
Early Breakfast with Africa Melane
04:00 - 06:00
volume_up
volume_mute

Up Next: Breakfast with Refilwe Moloto
See full line-up
Early Breakfast with Africa Melane
04:00 - 06:00
Home
arrow_forward
Business
fiber_manual_record
Opinion

How to bring fast, affordable connectivity to rural South Africa

5 December 2019 3:15 PM
Tags:
Rural areas
absa cib
Premeshin Naidoo
rural south africa
internet connectivity

Sharing networks, tax incentives and new tech are some of the ways to bring rural SA online, argues Premeshin Naidoo (Absa CIB).

Innovative solutions such as active network sharing, tax incentives and new technology deployment can be the solution to achieving feasible rural connectivity in South Africa.

pixabay.com

Ordinarily, rolling out telecommunications network infrastructure is an expensive and arduous undertaking for both fixed and mobile phone companies. Investors expect an attractive return on investment, and the tendency is for operators to concentrate investment in high population density areas where there are more customers than in rural and outlying areas with sparse population density. They also see little commercial incentive to invest in rural connectivity given generally lower revenue potential per subscriber.

Unsurprisingly, this is not a situation unique to South Africa or emerging markets; even in developed countries such as the UK grapple with the same problem. However, in the African context, achieving rural connectivity can potentially not only achieve government’s universal access to telecommunications objective but also boost rural economies, most of which desperately need a catalyst for growth and development.

There are several ways to promote and achieve investment in rural connectivity. For a start, policy needs to be supportive specifically to deal with the issue, and this has been attempted. A quick win however is to define what constitutes a rural area, and immediately permit network operators to jointly develop and share rural networks – if this sounds similar to a Wholesale Open Access Network (WOAN) concept, this is intentional and is an obvious implementation model for the WOAN on a basis which industry will support. In addition, the government can provide incentives such as tax relief for operators or help facilitate and channel grants from development finance institutions to help operators to commit to the required investment.

The government can also link the allocation of spectrum to the level of investment in rural areas. What this means is that the government will expect operators to allocate a portion of profits to develop rural connectivity. This is not new and has been promulgated previously in terms of the universal access to telecommunications, but government policy needs to be more deliberate and clearer on what is required to achieve rural connectivity.

Perhaps an idea is for operators to collectively allocate funding into a pool to be used to create a vehicle which will deploy a network, and operators then get an allocation of the network capacity consistent with its contribution. A variation of the WOAN concept but can be successful if supported by the industry.

Collaboration within the industry is becoming an imperative given the fact that Capex investment will increase going forward to account for ever-improving technology, and the 5G investment steps up. The return on investment for 4G networks must still be realised, operating margins are under pressure, and it will be even more challenging for the operators to go it alone. Collaboration will ultimately also be driven by investors’ requirement for a healthy return on capital.

With active radio network sharing, the capital cost to produce say a megabyte of data or a minute of a voice call reduces, which in theory means that an operator can increase their operating margins while at the same time reducing the cost to the subscriber.

In conclusion, we need innovative thinking to achieve ubiquitous high-speed rural connectivity in South Africa. It is a global phenomenon as much as it is an issue in Africa. There is, therefore, a need to consider implementing new solutions to create a network of connectivity which gives broader geographical reach. In as much as we look at traditional connectivity technology and investment strategies, there is a limitation and beyond that, we need to look at other solutions.

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:


This article first appeared on 702 : How to bring fast, affordable connectivity to rural South Africa


5 December 2019 3:15 PM
Tags:
Rural areas
absa cib
Premeshin Naidoo
rural south africa
internet connectivity

More from Business

Ecstasy mandy mdma 123rf 123rflifestyle

Decriminalise the use of recreational drugs – Department of Social Development

25 September 2020 3:37 PM

"It’s time to stop arresting drug users," Deputy Minister of Social Development Hendrietta Bogopane-Zulu told the UN this week.

Share this:
Read More arrow_forward

Elon Musk on the cover of Newsweek 123rfbusiness 123rf 123rflifestyle

Elon Musk is R1.1 trillion richer than at the start of the pandemic

25 September 2020 2:08 PM

The Pretoria native is having an excellent pandemic – much like his über-rich peers.

Share this:
Read More arrow_forward

Woman saving money piggy bank mask 123rf 123rfbusiness 123rflifestyle

Money lessons Covid-19 taught – heed them for a brighter, wealthier future

25 September 2020 10:44 AM

Your financial future – even if you have to start over – could be brighter than it would’ve been without the pandemic.

Share this:
Read More arrow_forward

Deputy Chief Justice Raymond Zondo at the state capture inquiry

'It’s sad and awful! Judge Raymond Zondo sounds resigned and defeated'

25 September 2020 9:17 AM

"Zondo’s comments at the end of the hearing; it was just so bleak! A sombre, grim end to a day," says journalist Erin Bates.

Share this:
Read More arrow_forward

cashless-paymentjpg

'SA cash economy about 60% of GDP, moving that to digital would be huge saving'

24 September 2020 8:39 PM

The Covid-19 pandemic's moving us towards a cashless society. Arabile Gumede interviews Ukheshe co-founder, Clayton Hayward.

Share this:
Read More arrow_forward

Small business owners entrepreneurs entrepreneurship 123rf 123rfbusiness

Retail Capital injects R500m into economy through Covid-relief for SMEs

24 September 2020 7:41 PM

'Smaller businesses have largely been ignored'. Arabile Gumede interviews Retail Capital CEO Karl Westvig.

Share this:
Read More arrow_forward

national_lottery.jpg

Diverted Lotto millions: 'Can we please get to holding people to account!'

24 September 2020 6:58 PM

Outa's Stefanie Fick urges the speedy investigation of allegations against the suspended COO of the National Lotteries Commission.

Share this:
Read More arrow_forward

Skyscrapers CBD Johannesburg 123rf 123rfbusiness

Long-term investment case for property in Africa remains intact

24 September 2020 1:38 PM

There’ll be many opportunities for frontier investors in the coming years, says Absa's Somaya Joshua.

Share this:
Read More arrow_forward

villa mansion pool dusk 123rf 123rfbusiness 123rflifestyle

Joburg City Power cuts wealthy Dainfern households for electricity theft

24 September 2020 12:49 PM

"There was resistance," says City Power's Isaac Mangena. "Security told us, 'Why are you here? Politicians stay in this area!'"

Share this:
Read More arrow_forward

Depressed boy child holding smile smiley pretending depression depressed 123rf

Social media: We are puppets. Especially our kids – Netflix documentary

24 September 2020 11:46 AM

We’re lab rats in a social experiment of unapparelled importance. Kieno Kammies interviews Dean McCoubrey of MySociaLife.

Share this:
Read More arrow_forward

More from Opinion

Ecstasy mandy mdma 123rf 123rflifestyle

Decriminalise the use of recreational drugs – Department of Social Development

25 September 2020 3:37 PM

"It’s time to stop arresting drug users," Deputy Minister of Social Development Hendrietta Bogopane-Zulu told the UN this week.

Share this:
Read More arrow_forward

Woman saving money piggy bank mask 123rf 123rfbusiness 123rflifestyle

Money lessons Covid-19 taught – heed them for a brighter, wealthier future

25 September 2020 10:44 AM

Your financial future – even if you have to start over – could be brighter than it would’ve been without the pandemic.

Share this:
Read More arrow_forward

Skyscrapers CBD Johannesburg 123rf 123rfbusiness

Long-term investment case for property in Africa remains intact

24 September 2020 1:38 PM

There’ll be many opportunities for frontier investors in the coming years, says Absa's Somaya Joshua.

Share this:
Read More arrow_forward

Depressed boy child holding smile smiley pretending depression depressed 123rf

Social media: We are puppets. Especially our kids – Netflix documentary

24 September 2020 11:46 AM

We’re lab rats in a social experiment of unapparelled importance. Kieno Kammies interviews Dean McCoubrey of MySociaLife.

Share this:
Read More arrow_forward

Cape Town, South Africa aerial view shot 123rflifestyle 123rfSouthAfrica 123rf

'It would be catastrophic for consumers if Transnet gets 20% port tariff hike'

24 September 2020 8:28 AM

Data used to determine the hike was gathered before the economy-crushing lockdown, says Felicity Purchase (City of Cape Town).

Share this:
Read More arrow_forward

bmw-adpng

BMW pays tribute to SA fave 'Gusheshe' (325is) with limited edition 3 series

22 September 2020 8:19 PM

BMW releases an 'ode' to an iconic earlier model. The ad reflects local culture, says Sizakele Marutlulle (Marutlulle and Co).

Share this:
Read More arrow_forward

Shocked little girl cellphone internet safety children 123rflifestyle 123rtf

How to talk to your child about porn – and, importantly, how not to

22 September 2020 3:31 PM

Pippa Hudson interviews Pam Buchalter, a psychologist and co-founder of Klikd, a platform for parenting in the digital age.

Share this:
Read More arrow_forward

Gold teeth lip tattoo

Gold teeth must fall! – Dr Kometsi Mokuele (dentist)

22 September 2020 12:46 PM

Lester Kiewit asks Mokuele why he’s offering free gold teeth removals at any of his Sunset Dentistry branches.

Share this:
Read More arrow_forward

2020-09-21MyKreepy Krauly teacher

My Kreepy Teacher: How Kreepy Krauly's parody of My Octopus Teacher went viral

21 September 2020 7:24 PM

Bruce Whitfield interviews the brains behind the hysterical parody of the smash-hit Netflix documentary “My Octopus Teacher”.

Share this:
Read More arrow_forward

rands

Covid-19 resurgence in Europe smashes South African rand off its pedestal

21 September 2020 6:50 PM

The rand was just recently trading at a six-month high. Arabile Gumede interviews Bianca Botes (Peregrine Treasury Solutions).

Share this:
Read More arrow_forward