SA smart cities: Who will pay?

Retailers offer Wi-Fi as a way to lure customers. (Duncan Alfreds, Fin24)
Retailers offer Wi-Fi as a way to lure customers. (Duncan Alfreds, Fin24)

Cape Town - As Wi-Fi internet access grows in SA, the question on how it will be financed is critical. A few municipalities are leading the charge to build smart cities.

In South Africa, public Wi-Fi access represents an opportunity to make cities smart and stimulate economic growth.

In urban areas, both the City of Tshwane and the Western Cape provincial government are actively rolling out programmes for near universal Wi-Fi as part of a R1.3bn broadband plan.

But the story of internet access is wider than just urban dwellers and in rural areas, the question of funding is particularly acute.

"Access is fast being considered a right and as a taxpayer I would say that taxes should pay for roads so surely the same could be said about access - but it doesn't seem to be the case", Michael Fletcher, sales director for sub-Saharan Africa at Ruckus Wireless told Fin24.

Universal Wi-Fi is more than simply a way for citizens to have access to the internet. World Bank statistics show that a 10% increase in access results in 1% growth in GDP.

Universal internet coverage

Wi-Fi however, comes at a cost and policymakers have wrestled with a sustainable strategy to deliver mobile data connectivity.

The City of Cape Town is building its broadband programme based around the needs of communities.

"The City is working toward making Cape Town the most connected city on the continent.  The City has installed SmartCape access computers in libraries and other walk-in centres across communities", said Councillor Garreth Bloor, Mayoral Committee Member for Tourism, Events and Marketing.

Internet connectivity in the City of Cape Town has resulted in savings for government communications. (Duncan Alfreds, Fin24)

In her State of the Province Address, Western Cape Premier Helen Zille promised that the province would see universal internet coverage in a deal signed with Neotel.

"Neotel has therefore generously committed to funding the infrastructure rollout of 384 Wi-Fi hotspots, using Western Cape Government buildings, which will cover almost every ward in the province.  Our government will be subsidising the free portion of citizens' internet access", Zille said.

The City of Tshwane has the ambitious goal of universal Wi-Fi to residents and the first phase is already complete.

"In the next eighteen months, the City of Tshwane will expand the project and roll out about 600 additional Wi-Fi hotspots throughout Tshwane, prioritising institutions of learning," said Alan Knott-Craig jnr, the brains behind Project Isizwe which has been tasked with rolling out the service.

National policy

National policy calls for universal broadband coverage by 2020 and while most would agree that mobile is the correct route given the challenges with last mile cable broadband, 3G too, has acute challenges.

Despite policy on mobile spectrum going back as far as 2008, the regulator has yet not moved to assign the key 800MHz band currently occupied by terrestrial broadcasters, notably the SABC which has proved unwilling or unable to migrate its services to digital terrestrial television.

However, even if spectrum was assigned immediately it is likely that the cost of data would continue to limit true mass adoption of high speed data services.

Modern First World cities like Tokyo have shown that internet access can accelerate technological development. (Duncan Alfreds, Fin24)

According to data from Ericsson's Mobile Data Traffic Growth report for 2013 to 2019, the Sub-Saharan region's data appetite is huge and expected to grow at 65% to 2019 and beyond.

Put into perspective, mobile data in the region was at 37 000 terabytes (TB) per month in 2013, and that will jump to 76 000TB by the end of 2014, on its way to a mammoth 764 000TB by the end of 2019.

According to the GSM Association's Sub-Saharan Mobile Economy report of 2013, the deployment of 3G services is at 7.6% in the region, and 39.3% in SA.

The global average for developing markets is 17.3% for 3G data services.

“Wi-Fi coverage can be done much more cost effectively than licensed spectrum coverage. Wi-Fi allows coverage to go to more marginal areas than GSM as such, there is definitely room for growth and industry players need to continually look at innovative ways to bring connectivity to rural areas,” said Fletcher.

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