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ITWeb Africa Reveals New Payment Methods To Improve Data Revenue In Africa Posted in Heavy Chef News, Concocted by Wendy Tayler,
Published on 22 October 2012

Gareth van Zyl is the Editor of ITWeb Africa, a site that provides analysis and insights into the continent’s changing telecoms and technology industry. We get a chance to talk to Gareth about his experience working in digital in Middle Eastern Asia, and we find out his predictions for the South African technology market, which includes new payment methods to help improve the country’s data revenue.

GARETHYou have previously worked in Dubai and Abu Dhabi at media companies. Now, being the editor for ITWeb Africa, what would you say are the main differences between Africa and Middle Eastern countries when comes to technology and digital as a business tool?

Arab Gulf cities, such as Dubai in the United Arab Emirates, have become major international hubs, and with that their technological developments have had to keep pace. When I first arrived in Dubai in 2008, the average household broadband speed in the UAE was probably not very different in terms of price and speed to that of South Africa. However, I saw that change rapidly in my time in the UAE, as literally, over the course of one night my internet service provider upped my home broadband speeds by 16 times from about 500 kbps to 8 mbps. And the price for the package remained unchanged. This kind of increase in internet speed offerings in such a dramatically short space of time would never happen in South Africa. I feel in many ways that since I’ve come back to SA, I’ve become highly aware of how shockingly poor the state of broadband is in the country and on the continent. So, broadband is taken more seriously in the oil rich Gulf countries in particular, and it’s viewed as being a key factor in helping to drive economic growth.

A second main difference that I noticed while I was in the UAE is that the country is highly motivated in making it easy for global tech firms to setup a base there. So, in Dubai, for example, they’ve set up free zones such as ‘Internet City’, which is literally a dedicated business area that houses global firms such as Microsoft, Hewlett Packard and Oracle, all within in walking distance of each other.

Which brings me to my next question, what do you think Africa could learn from the Middle East and their uses for technology? Whether it be learning from their triumphs or mistakes.

South Africa and Africa can definitely learn from the things mentioned earlier, as I don’t think we do enough to attract foreign direct investment, especially from multinational technology firms.We need to focus more on developing broadband and attracting tech investors. However, there are mistakes that the UAE is making in terms of technology in my view. Firstly, there is an attitude among the elite running that country that online and media freedoms are a negative force in society. It’s not just the likes of pornography websites that are blocked outright by internet service providers in the UAE, but there have been bloggers – who have written posts asking for democracy in the UAE – that have been arrested. It’s not uncommon for these bloggers’ content to be blocked online by internet service providers as well. The Arab Spring probably heightened tensions between a very small number of local Emiratis campaigning for democracy and those ruling the country. As a journalist in that country, if you’re critical of the government, you could also get into trouble. It’s a highly sensitive and sometimes tense situation.

Having said all this, the UAE is a lot more ‘free’ in terms of its media, than say, Saudi Arabia and Bahrain. But I think the situation in terms of media freedom is bad enough in the UAE that it should be highly criticised by the international community. So, in this instance, the UAE can definitely learn from SA, which has a high level of freedom of speech online. What I found really interesting as well is that even though the UAE has a high level of foreign direct investment, actual local innovation is thin on the ground. Perhaps it is because the country does not have a culture of openness, both on a social and political level, that this is the case. Or maybe it’s because the UAE has a small population. But there are really no local Emiratis creating startups that are worth noting. And, sadly, most startups in the UAE are also headed up by expatriates who make up the majority of the country’s population.

On the other hand, I think that Africa has really opened up more in the last decade, and we’re beginning to see some exciting start-ups in countries such as SA, Kenya and Nigeria. People in these nations are actively looking at needs and problems, and using technology to find solutions. We find out about fantastic African start-ups almost daily on ITWeb Africa. Tech or innovation hubs are also springing up all over the continent, making it easier for Africans to collaborate and create new and exciting tech offerings.

You recently wrote an article about African countries and the ’sending party pays’. Can you explain this to us?

‘Sending party pays’ is a measure that the The European Telecommunications Network Operators’ Association (ETNO) is looking to get adopted by various countries at an International Telecommunications Union summit to be held in Dubai in December. Telcos, globally, are increasingly coming under pressure particularly regarding voice revenues. According to the Independent Communications Authority of South Africa, for example, prepaid voice rates among telcos in the country have fallen 24% since 2010. This illustrates how telcos are coming under pressure to maintain their margins on falling prices. Subsequently, selling data is one means of improving their revenues. But fears exist among telcos that this may not be enough.

So ETNO is proposing that you – as a normal visitor to a website such as, let’s say, news24.com – should pay an extra fee to telcos to have a faster downloadable version of that website. ETNO is proposing that this measure, though, should not ring fence the internet to only those who can afford it. So, if you decide not to pay the extra fee, then it is planned that you’ll still get a ‘standard’ version of the website. ETNO, therefore, is trying to lobby global support for this initiative. They’ve approached African nations as well. And experts have told ITWeb Africa that various countries on the continent have been open to ETNO’s proposals, as officials in these countries think that their telcos can make more money with the help of this initiative. It is important to remember that governments in Africa are increasingly looking to telcos to generate tax revenues. ETNO argues that this measure could improve broadband infrastructure and help keep telcos profitable. But critics have lashed out by raising concerns that it could result in Africans getting a substandard version of the internet because they can’t afford the superior version of the online content. The worst case scenario is that online content providers start to only focus on producing a high standard version of their website, and many Africans then could be left out as they don’t have the funds or the means, such as credit cards, to pay for the content. It’s unclear at this stage whether this proposal could be passed – individual country members are to cast their vote on the matter in December. However, the US and UK have already said that they oppose the measure.

Vodacom stated that they have launched 4G this month. What are your thoughts on that?

I think it’s a step in the right direction. But all of us working in the tech industry know that the SA government has not actually allocated spectrum for LTE in South Africa yet. So, Vodacom is refarming spectrum on its current network in a bid to offer what is at this stage a rather limited LTE network offering in just certain parts of Gauteng. LTE and 4G are going to be hot-topics moving forward in the tech industry in SA in coming months. We’ll gain more insight into the quality of LTE networks in the country when we are in a position to compare an 8ta LTE offering, for instance, with Cell C’s LTE offering.

Personally, I haven’t tried LTE offerings in SA yet; I’m hoping to do so soon. But from what I can gather, I’m only expecting to see speeds that are double that of 3G in South Africa.

How do you see digital developing in South Africa over the next year? Will social media still lead the way? Any predictions?

I think it is exciting times in South Africa regarding digital, despite negative sentiment regarding our economy and our poor state of broadband. Forecast growth for SA’s IT sector is pinned at over 10% this year by the likes of Gartner. I’m not sure if the research firm, though, will review this figure after credit ratings agencies downgraded SA, but nevertheless, South Africa’s broadband penetration rate is still very low, and there are opportunities in that space. So, I think we’re going to see a big push from telcos to get more South Africans online. LTE and other mobile broadband offerings may become key in growing the country’s broadband market as well, so, we are going to be ‘4G’d-out’ by marketers in the coming months. As a result of this broadband push, I think social media use should continue to rise. But the key focus in the digital industry will be on offering tech services to people, such as broadband, and home-grown start-ups will hopefully emerge in this growing market too.

Find out more about the latest technology market reports and features at ITWeb Africa. Follow Gareth on Twitter here, and ITWeb Africa here.

Read more posts by Wendy Tayler

Wendy Tayler

Wendy is the Editor in Chief at Heavy Chef. After 3 years cooking up a storm at UNISA studying English and Communications, Wendy decided to mesh her passion for writing with her love of digital. She firmly believes the world is moving into the online sphere and can be found writing, tracking down great names for interviews, or singing her heart out at the World Wide Creative studio.

Follow Wendy on Twitter

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