High costs hinder SADC’s ICT growth

 

ICTs are a diverse set of technological tools and resources used to communicate and create, disseminate, store and manage information

Derek Wilcox, Africa chief executive officer (CEO) at Dimension Data – a South African company specialising in information technology services, with operations on every inhabited continent, believes the high costs of telecommunication technologies (telephony, cable, satellite, television and radio, computer mediated and video conferencing) along with digital technologies (computers, information networks – internet, World Wide Web, intranets and extranets – plus software applications) are hindering ICT growth and development not only in the SADC region, but in Africa.

“I do not think it is the area that is going to drive growth going forward. Data is still very expensive; it is still very inaccessible to many. We won’t really see e-commerce take off in Africa,” asserted Wilcox, at Meeting of the Minds: Connecting Africa – the ICT agenda, which took place at the University of Johannesburg’s Kingsway campus recently.

Wilcox went on to say that regulatory uncertainty in addition to high costs of telecommunications and digital technologies are inhibiting the ICT sector from reaching its full potential in the region.

Sharing same views, Collence Chisita, a Harare based researcher, affirms that the main factors that affect telephony also affect data communication, and limited access to the fibre optic systems in the region contributes to higher prices for bandwidth capacity.

“The ICT sector in most SADC countries has challenges in both the data and voice arena. As a result, Southern Africa, with its limited fibre optic systems, is one of the regions in which internet access is expensive. As a result, ICT growth and development in the regional grouping is stalled,” said Chisita.

He also blames lack of funding from governments.

 “ICT growth in the regional grouping is further deterred by lack of support from governments leading to underfunding of science and technology programmes. This is fueling costs leading to restriction of access to the new technologies,” he said.

The African Development Bank (AfDB), a multilateral development finance institution established to contribute to the economic development and social progress of African countries, concurs.

“Poor infrastructure support base in addition to high costs of ICT equipment, telecommunications, or installing e-commerce systems are holding back ICT development not only in the SADC region, but also in the continent,” noted the AfDB.

South Africa’s Communications Minister, Yunus Carrim, conversely, faults lack of cooperation from the private sector. He believes that governments are not receiving enough support from the private sector.

“We both need each other; we have to work closer together. There’s been a dramatic increase in the use of cellphones in the region, but it is still far short of what the potential is. There is a lot of potential, a lot of growth,” he explained.

He added that consumers, businesses and governments are expected to reap the benefits of an increasingly connected Africa, but it seems that more cohesion and cooperation is needed between the various ICT stakeholders to cut costs hindering growth.

Research ICT Africa (RIA) executive director, Alison Gillwald, encourages cooperation between all stakeholders. She also urges operators to look for innovative ways to cut costs and boost ICT growth in the SADC region.

Gillwald believes that lower costs will lead to more technology investment as well as diffusion of information and communication technology.

“Operators should look for innovative ways to cut costs, cooperate in terms of building networks, as well as implement new technologies that save them money for delivery of services if the region is to boost its ICT growth,” she noted.

Popular cost-cutting strategies for operators include, network outsourcing and infrastructure sharing. 

Therefore, Gillwald advises operators should outsource their networks, information technology systems, call centres and other support functions to network operating companies.

She also believes that not only does network outsourcing help reduce capital and operating costs, but it also means that operators can focus on other commercial strategies such as improving client care, marketing and branding over and above providing good, innovative services.

SADC faces the problem of high costs and insufficient technology application, but the problem can be tackled provided respective parties are willing to work together to ensure the region takes its place in the global marketplace.

A positive regulatory environment, without doubt, will allow operators to implement cost-cutting strategies that will enable the region to meet its ICT needs – that is to stimulate innovation as well as to encourage the creation and development of new ideas, products and services. 

April 2015
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