Information Technology Reference
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and make use of its own network - the alternative
providers merely operate their own billing systems,
support desks, marketing campaigns, and the like.
Telkom does offer a means through which provid-
ers can provision their own bandwidth and hence
merely use Telkom to connect the customer to the
closest telephone exchange. However, the plat-
form (called IPConnect) is sold in such a manner
that the margin between the wholesale and retail
tariffs is negligible. This means that only large
scale ISPs, with very high volumes of Internet
traffic, would consider this a feasible business
model. For this reason, a few large players (such
as Internet Solutions and WebAfrica) have to
date utilized this platform to provision residential
broadband services. Nonetheless, as the volume
of broadband traffic grows, other providers are
conducting feasibility studies into the prospect of
migrating their user base onto their own backbone
using Telkom's IPConnect.
Fourthly, South Africa's teledensity is lower
than that of many broadband leaders. In the centre
of London, for example, residents live in close
proximity to each other and less cable is thus
required to reach a given number of residents. In
South Africa, due to high levels of dispersion of
the population and a country five times the size
of the United Kingdom, more cable is required
to build a comprehensive network. Another key
point in this regard is that a negative correlation
exist between the length of the local loop and the
theoretical limit of the ADSL data throughput rate.
Currently, the local loop is between four to five
kilometres in length. Telkom feel this should be
closer to two kilometres. In order for ADSL2+
speeds to be possible, it will be necessary to
redevelop parts of the network in order to imple-
ment shorter local loops. Again, the infrastructure
costs may not prove economically viable unless
favourable returns can be generated on the service.
Fortunately for telecoms operators in South
Africa, urban sprawl has been reigned it through
escalating property costs. There now appears to be
a trend towards living in clustered accommodation.
This is advantageous for the purpose of increas-
ing teledensity as security complexes and blocks
of flats, often referred to as gated communities,
are now being wired internally for high speed
networks. In fact, new clustered housing develop-
ers are ensuring that their projects are cabled for
high speed connectivity from the outset, therefore
preventing retrofitting such infrastructure. This has
meant that such communities are able to benefit
from fibre deployment, lending itself to triple
play services such as cable television, broadband
connectivity and telephonic services from a single
service provider.
GOLDSTUCK'S INTERNET
HIERARCHY FRAMEWORK
Arthur Goldstuck, a prominent Internet histo-
rian and researcher in South Africa, considered
Maslow's hierarchy, grounded in human behav-
iour theory, and developed a parallel hierarchy
relating to consumers' online needs. The model
encompasses levels for access, quality, utility,
community and strategy (in ascending order) and
is depicted in Figure 4.
The individual layers are detailed in Table 7
below.
Unfortunately, it appears that whilst broadband
users elsewhere in the world have ascended to the
top of the pyramid (i.e. the community or strat-
egy level), problems at the quality level have
prevented South African broadband users from
obtaining maximum benefit from the Internet,
limiting most to the utility and community layers.
Examining the situation from an industry
perspective, Goldstuck developed a further itera-
tion of the model based on the hierarchy of needs
depicted above. As can be seen, the left-hand side
of the triangle is superimposed over a quadrant-
based model that reveals the impact of various
strategies on ISPs and their customers.
The Necessary Evil / Unconditional Need axis
(x axis) indicates the perspective of the corporate
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