Internet users in the world, Africa and South Africa
In the year 2006, 6,5 billion people lived in the world. Currently, the world population increases approximately every 13 to 17 years to additional one billion people. [7] In 2002 558 million people used the internet. In October 2006 it was already 1093 million internet users, consequently the number almost doubled in 4 years. [8]
In 2002 the internet access in South Africa continued to grow, but even more slowly than expected. One reason for the slow increase was that Telkom delayed the licensing to the second network operator on purpose. Telkom had until February 2005 a very uncompromising attitude regarding internet service providers and market ignorance about the continued value of the internet in South Africa. ISPs and its customers had and still have to pay exorbitant internet access fees, but even worth is that there is an absence of healthy competitive environment. [9]
Figure: Growth rates of the internet worldwide, 1995 - 2006
- Growth rates of the internet worldwide
Source: Own illustration; internetworldstat.com
Figure: Growth rates of internet users in South Africa 2000 - 2006
- Growth rates of internet users in South Africa
Source: Own illustration; internetworldstats.com
The turning point in South Africa was at the end of December 2005 where the growth in the private sector and dial-up market stagnated. At the beginning of 2006 a solid growth was recorded in the corporate usage and a dramatic increase of broadband (high-speed internet access) pushes the number of internet users in South Africa. The decreasing costs of internet access depend heavily from the timely roll-out of the competition of the second network operator (SNO). Until June 2006 there was no clarity when or how the SNO will begin to provide internet access to the local market. [10] However, in November 2006 the SNO[11] announced the launch of ADSL[12] and wireless broadband services at the prospective roll-out by beginning of 2007. The growth has returned in 2006 and will continue to increase, if the SNO will start its services. Nevertheless, South Africa suffered a long time and still suffers under the telecommunication monopoly and the expensive internet fees in the last 15 years.[13]
In 2005 the first serious competitors came with wireless LAN (Local Area Network) into the market and the prices of the internet fees dropped step by step. Among that South Africa has one of the highest internet costs world wide, the demand is still very high. Within one year, from 2005 to 2006, the number of internet users increased by 1,5 million people; that means a growth of 28 % in just one year. Referring to the world statistic (see Figure 16) there was “only” a growth of 14 % from 2005 to 2006. Hence, the increase of internet users in South Africa was twice as high as the growth of internet users worldwide.
It is interesting that South Africa was also one of the fastest growing cellular and mobile phone market in the world because of a poor land line infrastructure and high land line telephone costs[14]. The South African telephone costs in 2006 (3 minutes for a local call) are 35 % more expensive than the German telephone rates[15]. Not to forget that the income level is much lower in South Africa.
3.3.5 Internet demographics and statistics
According to the latest research released by Nielsen-Netratings[25] 7,1 million South African people a month assessed OPA (Online Publish Association) member sites in quarter 3 of 2006 in comparison to 6,7 million people in quarter 2. These figures reflect a continued pattern of growth. The Nielsen research shows a steadily growing core online audience of high income consumers and illustrates a clear picture of the demographics of the online population in South Africa.[26]
To understand the internet market in general, to make strategic decisions for the future and to define target groups it is essential to know conditions, attributes and characteristics of the internet market in South Africa. The following paragraph gives a detailed description of the South African internet users demographics in 2006.
Figure 21: Access ways to the internet, September 2006
Figure: Access ways to the internet in South Africa, 2006/07
- Access ways to the internet in South Africa
Source: Own illustration; www.biz-community.com/Article/196/23/12516.html
Out of 5,1 million internet users in 2006, 61 % live in the largest towns in South Africa. From the graphic one might conclude that the concentration of internet users is extremely high. Hence, the rural areas are underdeveloped regarding telecommunication infrastructure. The relatively low level of internet penetration in South Africa during the last years, associated with the high internet prices, slowed down the growth of many internet-based businesses. Most of internet publishers depend on revenues from advertisements placed in the website.[27] Due to high internet costs and respectively low income it is not amazing that almost 2/3 of users access the internet from their workplace and only 27 % from home. This figure will change rapidly if internet costs drop and broadband become available for a reasonable price.
Figure 22: Urban user base, September 2006
- Urban Internet User Base in South Africa
Source: Own illustration; www.biz-community.com/Article/196/23/12516.html
South Africa has a concentrated population structure with living almost 50 % in the large metropolitan cities and surroundings. It is significant that almost 2/3 of the internet users are located in the four big cities Johannesburg, Cape Town, Pretoria and Durban (see Figure 22). These cities are the big business centres in South Africa. If one may consider that out of 5,1 million internet users in 2006 (see Figure 17) only 27 % of internet users access the internet from home, which makes only 1,3 million users, but rather living altogether almost 20 million people in cities, is there plenty of room for growth, especially in the private household area to provide internet access.
If one may assume that the internet costs and fees are becoming reasonable and the data traffic restrictions and limitations will decrease it is very much likely that individuals will obtain internet access and consequently the demand for internet service providers will increase as well.
Figure 23: Age structure of internet users in South Africa, September 2006
- Age structure of internet users in South Africa
Source: Own illustration; www.biz community.com/Article/196/23/12516.html
It has been alarming that 64 % of internet users are 34 years and younger. There is a tremendous lack of internet users which are older. One may assume that this development is significant due to a changing society. Most people and also businesses are very indigenous and conservative relating to new technologies respectively the internet, especially in a country where the technology to access the internet is comparatively new, if you consider that broadband access is only possible since four years in South Africa. With more dispersion and knowledge of benefits of the internet one may convince businesses and private households to obtain internet access and will change this figure in the long run.
Another significant number is that 32 % of the internet users are younger than 24. This illustrates that young people are already have experienced the advantages and benefits of the internet.
A quite significant but also clear grievance number is that almost 80 % have some further education and 34 % have a degree or post degree (see Figure 24). This reflects the social exclusion of a minority regarding education and access to new technologies. This is a perfect illustration to point out the disparity of the population. It is a task of the government and of the politics to change these conditions. The society in South Africa is still affected by the Apartheid regime and the great injustice in the society in South Africa. However, the first small steps are made, for example in some public schools in Cape Town the government and also private sponsors have installed computer rooms with internet access.[28]
Figure: Education of the internet users, September 2006
- Education of internet users in South Africa
Figure: Income level of Internet users in South Africa, 2006/07
- Income_Level_of_Internet_Users_in_South_Africa
Source: Own illustration; Bizcommunity.com
The income level of internet users shows the discrepancy of the unequal society. The majority of households which are internet users have more than 150 000 Rand income. In the year 2004 the median annual income per capita of Black working adults (15-65 years) was 43573 Rand[29]. In the year 2005 the total average income is 77816 Rand (8367 Euro).[30] It is obvious that only high income households have the possibility to obtain internet access (the cheapest DSL access fees plus one telephone land line costs about 1199 Rand ;128 Euro[31]). Compared to the average income level per capita these costs are exorbitant.
Figure 26: First language of the internet users in South Africa