Background: South African Telecommunications Environment
South Africa has the best developed and most modern telephone system in Africa. There are almost 110 combined fixed-line and cellular telephones per 100 persons. There are 5.1 million Internet users. The network is 99.9% digital. The fixed-line monopoly of Telkom SA, a listed company in which the government is the largest shareholder, expired with the licensing of Neotel as South Africa's second national operator, starting operations in November 2007. Neotel is licensed to provide the entire range of telecoms services with the exception of full mobility. Neotel is expanding their network fast, but so far is concentrating on urban areas. The South African mobile communications market is growing fast. The country's three cellular network operators (Vodacom, MTN and Cell C) have over 39-million subscribers, or nearly 80% of the population.
However, although there are now over one million broadband subscribers, mostly using ADSL or HSDPA, bandwidth remains relatively limited and expensive. Major cities such as Cape Town, Durban, Johannesburg and Pretoria have launched public-private initiatives to build their own broadband networks to provide cheaper voice and data services. For example, the city of Tshwane, which includes Pretoria, is testing delivery of broadband Internet and voice services on their new metro-wide fibre-optic network using wireless hot spots to provide ADSL access. In the meantime, the high cost of broadband access has stimulated development of Wireless User Groups. The WUGS are not allowed to sell internet connectivity, since they are non-commercial community networks. Although non-profit and operating in the license-exempt spectrums, their legal status is not clear. In October 2007, JAWUG requested clarification on whether it required a radio frequency spectrum and/or ECNS license for its activities.
Telkom provides relatively poor voice and internet service in underdeveloped rural areas of South Africa, although it is investigating ways to improve service using wireless technology. The Independent Communications Authority of South Africa has licensed several small telecoms firms to operate regional networks in remote, under-served areas of the country. Bokone Telecoms in Polokwane and Amathole Telecoms in the Eastern Cape are experimenting with WiMAX technology to provide service. However, due to relatively high costs and low revenue potential, these initiatives are moving slowly. There is room for more innovative approaches.
Currently, VoIP (Voice over Internet Protocol) service is allowed only in areas where less than five percent of the population have access to a telephone, and WiFi is restricted to use by individuals or organisations within the confines of their own premises. The argument is that low-cost or free VoIP over WiFi would destroy the incentive for commercial network providers to upgrade rural networks. However, several commentators consider that this policy is counter-productive. As discussed later, many wireless community networks deliberately ignore the restrictions.
Read more about this topic: South African Wireless Community Networks
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