South Africa's economy is being short-changed as government policy decisions around the allocation of resources needed to deploy new-generation high-speed 4G, or so-called long-term evolution (LTE) cellular services, remain in protracted limbo.
The market for voice calls over cellular- networks is all but saturated. Since the first two mobile networks went live in 1994 – consistently smashing all expectations of uptake – and the subsequent introduction of two more mobile network operators, the focus has now shifted to data. And in the world of data, speed is everything.
High-speed data is a morass of acronyms, compound numbers and jargon. To put it simply, the mobile data connection on your smartphone or tablet runs at speed X on current 3G networks. The "G" stands for generation. On 4G or LTE networks you can at least double that X. Twice the speed. Electronic messaging happens in double time, as do downloads – that's good for business and the economy.
There is also an increasingly transactional component to cellphone use, particularly among smartphone users who would most likely be the initial users of 4G services.
Although South Africa's demand for LTE services will grow as more 4G-capable smartphones start to appear, initial uptake will be limited.
British firm Juniper Research predicts that there will only be 428-million LTE users worldwide by 2016 – or 6% of the total market.
More South Africans are starting to use their cellphone connections instead of landlines for primary data. Mobile data prices are falling at an average rate of 20% every year and LTE services mean there's no compelling reason to have a fixed broadband line.
Vodacom chief executive Shameel Joosub stated last week that South Africa's largest mobile network operator "will have LTE before the end of the year in some cities and that the company will grow its 4G coverage from there."
There is a caveat.
"We need additional spectrum for the full LTE experience," said Joosub.
"Spectrum" is those precious bands of radio frequency on which all wireless services – from radio and TV to cellular phone communications and emergency service radio communications – take place.
The department of communications has handed the responsibility of deciding who can use it and of allocating chunks of it for different purposes, to the Independent Communications Authority of South Africa (Icasa). Mobile network operators say they don't have enough of it to deploy 4G widely and want more.
Joosub said Vodacom was the first South African company to run a live LTE trial on its network more than two years ago, in June 2010.
"There's a proven link between internet penetration and [gross domestic product growth, a measure of economic activity], so by rolling out 4G connectivity we have a mechanism to directly address some of the biggest issues facing South Africa, like building the economy and job creation.
"There are less than one million ADSL [fixed broadband] lines in South Africa and only 10% of the population has access to any sort of fixed line. Mobile access has almost 100% penetration, so mobile technology is clearly the fastest and most practical route to get the country connected."
Joosub said: "About 75% of our base stations are LTE-ready and we've rolled out over 5000km of fibre to our base stations. The main stumbling block to fully launching LTE is a lack of spectrum."
Analyst Arthur Goldstuck, managing director of research firm World Wide Worx, is blunt: "There is no sense of urgency in government to embrace new technology. The importance of broadband is paid lip service – it's certainly not reflected in decision-making priorities and budgets."
He said government's vested interests in Telkom and Sentech – which between them sit with the bulk of the wireless spectrum – means competitors can't use it. "It's so counterproductive it beggars belief."
Neotel and iBurst also hold spectrum that could be used for LTE. Cell C offers a close-to-LTE experience on its current network and, as its network is upgraded, it will be LTE-ready. South Africa's fourth mobile network, Telkom's 8ta, has indicated it plans to offer LTE services in 2013.
Goldstuck said there's a strong will within government that LTE spectrum should be given to newcomers, to increase competition in the telecoms sector.
"It's a recipe for disaster. Entities with no significant infrastructure or experience may be given the go-ahead because of empowerment -credentials, despite not having the resources for effective provision of service.
"LTE services on existing networks could have been switched on 18 months ago. The only reasons they haven't yet are political and administrative. It's not about the ability of telcos [telecommunications companies]," he said.
Telcos have taken up the challenge of rolling out their own fixed-line fibreoptic networks. The transmission network, which links cellular base stations to the fixed-line telecommunications network, slows down where old copper wire links are still used. These bottlenecks can be avoided by laying fibre connections that have phenomenally high capacity.
Kanagaratnam Lambotharan, chief technology officer at MTN SA, believes there are ways everyone can win.
"Government has said that by 2020 it wants broadband for everyone. We think they should go to the incumbents who have the existing infrastructure and investment. We can help them achieve their goals," he said.
According to Lambotharan, South Africa's consumer appetite has tripled- and data consumption (excluding SMS) is up by 200% year on year. "Smartphone usage is up by 128% and data demand has grown to about 12-million users. There is a huge appetite for fast connections and accelerated download and upload speeds."
He said the commercialisation of technologies such as LTE is expected to address these needs.
MTN will begin rolling out its LTE services in Johannesburg, Pretoria and Durban, as will Vodacom. Cape Town will not form part of the initial roll-out plans of either network operator.
Lambotharan said strict regulations governing the city's historical buildings, plus Cape Town's sea and mountain topography, mean the city will get services but probably only next year. Some existing older radio spectrum can be re–allocated or repurposed for 4G -services, he said. Vodacom said upgrading of equipment in the Cape Town area will mean the region will get LTE next year.
Repeated attempts over several days to get comment from the office of the minister of communications were unsuccessful.
How fast is fast?
- Data speeds are measured in megabits per second (Mbps) and the higher the Mbps, the faster the data transfer rate.
- Most network speeds are actually theoretical and measured in ideal rather than real-world conditions where networks are busy and signals can become interrupted, distorted or dropped entirely.
- It is 18 years since South Africa's mobile networks were switched on and the 1G networks could only handle voice calls and SMS.
- With the 2G networks that appeared in 1995 you could send and receive data at a crawling 9.6Kbps (1 024 Kilobits per second [Kbps] = 1Mbps).
- In 2004 the first incarnations of 3G arrived (at launch its top speed was 384Kbps) but you had to have deep pockets – data was charged at R50 per MB at a slow 512Kpbs.
- Two interim data network technologies (called GPRS and EDGE) are part of the 2G ecosystem.
- LTE or 4G's connection speed can theoretically hit 100Mbps or more. The fastest technology currently in use in South Africa is 43.2 Mbps HSPA+. The real-world speeds are significantly lower but the speed advantage should remain.