Huge implications for Internet startups in South Africa | Hacker News Reader

Huge implications for Internet startups in South Africa

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26 pointsjrgnsd12 comments

It is interesting to see South Africa's two biggest rent seeking industries (telecommunications and banking) covered in one post :-)

Things are changing, but there are issues that more undersea cables and a tiny opening in the banking system won't be able to fix.

You still have to pay Telkom for a voice land-line, and that adds to the cost. It can still take months to get a land-line, and waiting for an ADSL connection is also a problem, so many people don't bother.

Telkom remains a de-facto monopoly for fixed lines (Neotel's current offerings still seem to be wireless, and of variable quality), and the South African government needs to be even more aggressive IMO in undoing the disaster of Telkom's mid-90's state-granted monopoly, and it also needs to take a tougher regulatory line with mobile providers. I'll really start celebrating when cheap uncapped wireless/3G becomes available at reasonable rates.

PayPal is also a good start, but the terms and conditions are strict. You can't leave the money in your PayPal/FNB account for longer than 30 days, and all transactions need to be reported to the Reserve Bank for exchange-control purposes through the FNB website. There is also a prohibition against "bulking", so I guess you may need to report and withdraw money for each transaction individually, meaning higher fees (see above point about rent seeking).

On a related note, exhange controls are a relic of the past, and should have gone years ago. Even though for the average person they are moot (the offshore allowances are now quite large) the amount of regulatory pain they put one through is deeply disruptive. I recall an former employer needing excon permission to purchase a developer suite from overseas - not the way to be part of the hi-tech global economy.

All very valid points that I didn't mention in my post. Would you mind adding this comment to the original post to add some insight? :)

I'd also like to comment on the original article but I need to have a twitter or posterous account of which I have neither.

The price war that mweb started when they launched their uncapped ADSL offering is indeed a huge deal at the moment.The fact is, SA has a HUGE population that's never been exposed to broadband internet since it's just been too expensive. If broadband suddenly gets affordable there is a chance of a tech mini-bubble emerging here a couple of years late.

But will we see a xhosa social networking site soon? Who knows.

It's not so much social networking sites that would be great, but the possibility of free interactive education. The quality of teaching that most (poor and black) South African school children are subjected to is shockingly poor.

As much as I agree with you, that is not where the cool stuff will happen. Sad as it may be, innovation on the web has never really been centered around education. And as far as the goverment is concerced, I don't think that smart ways of using technology to improve education are on the cards soon.

The talent and ingenuity of South African developers has been limited for years due to the 'tariffs' on international bandwidth. The removal of bandwidth caps is a step in the right direction.

I agree, the last-mile has not been the biggest problem given that there are 6 mbit ADSL lines available at rates on par with major US metro areas.

I would love to see a large WiMAX/LTE tower installed on top of Sandton City (and throughout Gauteng) to bring 20+ mbit wireless internet to the CBD.

Happy to see PayPal entering the South African market even if SARS wants to see all the transactions.

The hundreds of billions of dollars made when mobile phone networks started operating across most of Africa could be repeated with internet services.

However, it is my understanding that internet at the moment across most of Africa is trending towards UMTS and another wireless technologies that leverage the existing towers built for mobile access.

A single such tower covers a far wider area and is much cheaper to install and maintain than broadband cables. Also, factoring in that Africa is not very densely populated, I would think that wireless makes sense over wired.

This might be true for some areas in Africa, but there are areas such as Gauteng which are quite densely populated, and already have extensive copper and in some places fibre networks. The only problem is that access to these networks are still quite expensive.

There are some areas in Gauteng where Telkom lines remain heavily rationed. Factor in the risk of copper theft and consequent reliability issues, and wireless is very attractive.

This change has nothing to do with wired vs. wireless. The reason South Africans can now have uncapped internet is because, previously, international bandwidth was very expensive. However, new cables connecting Africa with the rest of the world have been going live, and will continue to go live over the next few years.

So basically, the "last mile" infrastructure, whether it's cables or wireless, was never the main limiting factor when it came to internet in Africa, but may become more important in future as demand increases.

As a south africa developer, I can just express my excitement about all the things happening in SA atm. We will see allot of new and exiting start ups. It has now been made easier. So this is big fir us! happy

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