South Africa Falling Behind in Broadband Advantage

January 21 - Coface, the South African credit insurance company, has warned the industry that South Africa will soon be losing its broadband advantage if the government does not take the necessary steps to promote broadband growth.

In a special research note, Coface said that South Africa was losing its competitive edge by not doing away with restrictive regulations.

In 2009, a 600 m fiber optic cable was launched by Seacom that has to potential to open up "unprecedented opportunities" for many countries in Africa.

However, the Coface report said that because of the restrictions still in place, as well as lack of competition in South Africa's telecom industry, much of the potential from the cable was still not felt in the country.

"South Africa is falling behind other African countries in adopting broadband internet as a result, and with other African countries making giant leaps in this area there is a concern that SA could lose its competitive edge," said the report.

In comparison, countries in East Africa saw an incredible improvement in their internet prices and broadband usage, thanks to the Seacom cable.

Analysts who contributed to the report said that Telkom's monopoly on the industry was "stifling broadband growth".

The analysts suggest that the ideal situation would be to privatize Telkom.

The report also touched on a few positive aspects of the industry. The insurance group said that cell phone users should see cuts in their interconnectivity fees this year.