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Why the death of BIS is bad for the country

27 February 2013, 07:20
I remember when the mobile internet first was introduced into South Africa. Rudimentary Ericsson and Nokia phones would display a few lines of text and maybe a blurry picture and we would be in awe. This was perfectly fine as the processors that our phones ran on didn't ever have to run the internet even when they were powering our 80x86 platform computers. It was great. The pricing was also phenomenal. For R2 per MB, you were connected. MXit used so little data that you would use a MB over a week or more. Google knew that data was priced as such and kept their interface simple. I also remember having long talks with peers about how this data business model would work for the cellular companies seeing that so little data is being sent. This was around 2004.

Little did I know that the South African cellular companies were banking on huge returns come 2013. Conniving? Completely. But we will get back to this.

Blackberries have become the de-facto phone for, well, everybody in South Africa. Coming from a culture where MXit reigned supreme; young and upwardly mobile people have turned to the Blackberry. Although mostly used for BBM, they have completely embraced and enjoyed the spoils that the unlimited BIS has brought. Granted, there have been many sites which have circumvented the rules behind the unlimited package and some have downloaded hundreds of GBs per month through unscrupulous behaviour, but on the whole, its been used responsibly. Don't believe me? Well, all networks have said that the typical user finished less than 200MB per month.

BIS has given South Africans something they have not experienced - cheap, on-demand, highly-accessible internet. If you're sitting at your favourite restaurant near a major shopping mall, all you needed to do is to check online to see what time the next movie was. If you had forgotten a booking reference number, you just use your mail client and give it to the hotel you're staying at. If you were lost, you'd just look up the address and put it onto your standalone GPS or use the awesome bundled GPS software on your Blackberry and you'd be found. I remember a situation where I was in the deepest, scariest part of Jozi and my Blackberry guided me out safely.

BIS gave South Africans data freedom. You didn't have to worry about any exorbitant charges. For around R60 a month, you could do everything you wanted using this modern technology called the internet. It allowed us to mimic the situations in other countries where internet access was a right for everyone and not a privilege of the upper classes. It could complement your lifestyle. You could send pictures and short videos to your loved ones and not worry that its going to cost your an arm and a leg at the end of the month.

This week, MTN began the murder of BIS. It shall soon come to the other four operators but for now, just MTN are playing the bad guy. Instead, there is a hard cap of 200MB followed by out-of-bundle rates for whatever else you utilise. You always have the option of purchasing a bundle. Let's just look at the figures.

On Valentines Day, Afrihost, a fixed-line ADSL internet service provider ran a special where data was on sale for R1 per GB. Yes this was a sale, but their top up fee normally is R24 per GB. This decreases drastically as you buy more. The last time I checked, an additional bundle on my Vodacom contract was, wait for it, R149 per GB. I will admit that these are vastly different technologies but the end product is the same - its the internet! Is the difference between fixed line and mobile technology 149 times more expensive (or if you use the normal price, 6 times more expensive?) Well if you do even more maths, the disparity increases when you compare how many Telkom subscribers have fixed-line internet at home versuses how many South Africans have access to even a crude Internet enabled cell phone. There obviously is a bigger market for mobile internet which should drive the prices down. Well not in SA. Overseas yes, but not here. For a comparison, in deepest, darkest Africa, there exists a country called Rwanda. They have about 3.5 million mobile phone users or so. Mobile internet, out-of-bundle, costs around R0.20 per MB. R70 will give you 7GB to be used in a week. SA has OVER 50 million cellular users yet we pay 10 times that figure for out-of-bundle data. Go figure.

Anyway, what does this mean to South Africa? For the upper class, it means nothing. We have migrated to iPhones and Samsung Galaxies so we have basically accepted it. Our mobile internet habits will not change but that is perfectly fine. The internet in the country is mostly supported by this upper class. Need proof? Even though I buy bundles, my monthly cell phone bill is close to R1000 every month as opposed to R350 when I had a Blackberry. This is due to my mobile internet usage. Now you know how money is being made from data.

But lower down the LSM, thats where things get interesting. For many people, the Blackberry was their first foray onto the internet. It was not this strange device accessible only by the guys that wore thick glasses in their class in school. These people got their first email address only a year ago. The wonder of Google and its vast knowledge was discovered a few months ago. The convenience of internet banking (and the savings that brings) as well as the ability to purchase thing securely, safely and cheaply online was probably only found out a few weeks ago. All the conveniences that have benefited the upper classes were slowly trickling down to general society.

eCommerce in SA is not huge as yet but the Blackberry has really made this a huge, untapped market. As internet figures, because of the Blackberry, have soared, this has opened up these beautiful new markets. In a few years time, the stigma surrounding internet usage would have disappeared and people would utilise it so much more. This would be great for business large and small as it would open up the internet for them. They can spend money on their sites because people will actually look at it. Traditional advertising and even overheads of office space will go down. This is a boon for small enterprises. Jobs will be created - the mythical word that SA is struggling so hard with.

But this is not going to happen. And I blame capped BIS for this.

People are now going to think twice before they use the internet. Knowing that it will cost a lot of money, they will think twice before viewing a blog, or downloading their email attachments, or checking a website for where a shop is situated, or download the Checkers coupons, or buy locally made goods from an online only retailer. The internet in South Africa stops growing today. Are you okay with this?

Using their mobile internet is a conscious lifestyle change that needs to be made. If its still so expensive, there is no reason to change their lifestyle to embrace the internet.

MTN and all other cellular networks are ensuring we stay in a state of data apartheid. The internet is for the rich and it must stay that way. As the rest of the world particularly Africa embraces this new technology which has transformed so many lives, we will remain stagnant.

So the death of BIS is basically the death of the internet in SA. I never thought this day will come. I pray everyday that the cellular providers come to their senses. Or maybe we need to lobby government to step in and smack some sense into the providers. 

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