South Africa clears 5 million Internet user mark

After years of stagnation, the number of South African Web users has passed 5 million people, taking the country's Internet penetration past 10 percent, according to a study.

A new undersea cable, the granting of Electronic Communications Network Service licenses to more that 400 service providers and the transition by small organizations from dial-up Web connections to broadband are some of the factors behind the growth.

South Africa is the largest telecom market in Southern Africa in terms of investment and mobile subscription, but the country's Internet penetration was slower than any other country in Africa over the past years. World Wide Worx conducted the study.

World Wide Worx managing director Arthur Goldstuck said South Africa will now continue seeing strong Internet growth and may reach the 6 million mark by the end of this year.

The South African government had declined to deregulate the country's telecom market and to allow new and small providers to develop and operate their own communication networks. Developing and operating communication networks were a hold over of large telecom service providers, which are owned by the South African government. 

After legal battles last year, the South African government started granting Electronic Communications Network Service licenses to all providers in order to open up the telecom market to competition. "This means that service providers that were previously required to buy their network access from one major service provider could now build their own networks or choose where they wanted to buy their access," the report said.

As a result, the report said, services have exploded in South Africa as small providers are now able to repackage the services provided by larger telecommunication companies in anyway they wanted it packaged. The larger providers in turn have begun offering more competitive packages to both customers and resellers.

With the expected landing of another undersea cable in South Africa this year, the report said competition in the broadband market will be heightened.

Across Africa, many countries have stepped up the pace of deregulation of the telecom market in order to encourage competition and bring down the high cost of communication.