While a BMI-TechKnowledge report released last week on the South African broadband and wireless access market has revealed that said access will increase substantially by 2009, SA will still be way behind most of the rest of the developed and developing world, unless something drastic is done.

Technically, SA does not, as the report notes, have true broadband at present. ?By comparison with the higher performance characteristics of the offerings in most developed countries, we would probably have to class very few of SA?s current products as being true broadband,? says report co-author, Tertia Smit.

?The entry-level of the various offerings will be increased over time, and, towards the end of the forecast period, this anomaly should have been worked out of the system, i.e. most offerings should be within the range of what may generally be called broadband today in an international context,? she adds.

According to the report, SA will have some 870,000 broadband subscribers (active and inactive) by 2009. The country will have an additional 4.4 million 3G subscribers, who access the Internet via mobile phones.

While these figures represent a significant increase on current subscriber numbers (100,000 PC broadband users, 3G figures are not yet available), penetration will still be nowhere near global averages.

At the end of 2004, according to a graph compiled by BMI-T, 68 percent of households in Korea had broadband, compared to 0.17 percent in SA. SA sits behind other developing economies like Croatia (0.2 percent), Slovenia (0.4 percent), Romania (0.8 percent), the Czech Republic (1 percent) and Brazil (2 percent).

Smit attributes SA?s low broadband penetration rate to:

-- The slow pace of roll-out of Telkom?s ADSL to date, as prices are being managed progressively (rather than suddenly) lower and ADSL infrastructure roll-out is being deployed accordingly, at the same roll-out rate;

-- Lack of competition at the backbone level, and Telkom?s method of structuring pricing, including a double line rental charge, and lack of a true wholesale rate to ISPs;

-- International bandwidth charges on SAT-3 are still very high;

-- The costs involved for new wireless operators to roll out infrastructure, and the need to maintain respectable prices for a while thereafter, so as to recoup their investment;

-- Entry-level products (including ADSL) are still dearer on a monthly basis than alternatives, such as ISDN and analogue dial-up, for most low-end users.

?BMI-T expects that the new regulations, the Convergence Bill and the licensing of the SNO will introduce further competition, forcing prices down (BMI-T expects them to drop by 50 percent within two years) and penetration rates to increase. The forecasts are highly sensitive to regulatory scenarios, and how the independent players are allowed to play in future -- including the type of wholesale pricing regime (especially for ADSL) that is expected to emerge in future,? she states.