16 May, 2021 by
Jacobus Erasmus

Internet Costs

Why is the internet so expensive? 

The perception is that the internet in South Africa is very expensive. But in the reality this is not quite true we pay about the same as the US, Australia and other developed countries. 

First, let us answer the question: "Why is other countries internet prices relevant to South Africa?". It depends on what the main cost component is to deliver services in South Africa. If it is the hardware then the prices will mostly be the same. We are using the same equipment as the US, Australia. So it is expected that the prices are similar.

Now we need to compare different parts of the internet infrastructure. The two main methods of delivering internet to end-users are via 3G/4G connections or via fixed-line which, at the moment, mainly consist of fibre.

Odoo • Text and Image
There is some movement on fibre but not a lot. The problem is not infrastructure but that the 3G/4G standards are encumbered by MANY patents that increase the cost significantly. Added to that the spectrum is crowded and that the equipment is very expensive we see that bringing down mobile costs are "HARD". 
There is not much hope to bring MOBILE down to manageable levels.

What about fibre. You would think that there is a possibility to drop costs here, and indeed there are. Fibre infrastructure is very expensive to roll out and the biggest part of your monthly fee pays for the recently installed infrastructure. This is also the reason that richer areas are rolled out first. They pay more and therefore the infrastructure gets paid off faster. 

What are we to do?

Very little I'm afraid. We just have to sit  tight and wait a few years and the prices will naturally come down. 

Jacobus Erasmus 16 May, 2021
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