Edward Van Zyl
A LEADING not-for-profit organisation has accused SA’s property sector of sabotaging the growth of small and medium-sized enterprises (SMEs) by actively reducing the availability of high-speed broadband in business parks.
Juanita Clark, CEO of the Fibre-To-The Home (FTTH) Council, says SMEs in SA are at a huge disadvantage compared with their global peers as local average internet connection speeds remain the slowest in the region.
The FTTH Council is a pressure group representing 550 companies, which believes development and deployment of fibre optic-based broadband will boost economic growth and increase citizens’ quality of life. The council is affiliated with similar organisations in Europe, Asia and the Middle East.
SMEs are already struggling to survive, says the group.
According to the Global Entrepreneurship Monitor Global Report 2013, the entrepreneurial intention rate (people planning to start a business within three years) is 13%, which is well below the sub-Saharan African average of 46.8%.
Ms Clark says as SMEs search for ways to grow they have the opportunity to embrace a new wave of information technologies. Yet the adoption of the latest IT trends, including broadband, by smaller companies has been uneven.
"The property industry is treating it as a nice-to-have rather than as a basic right and are actively limiting access to buildings. Going forward, high-speed access will become a part of the basic business proposition of office parks. And forward-looking property managers need to recognise this."
"We need to reduce the cost of communication in the country. We see access to broadband as important as water and electricity," she says.
But the SA Real Estate Investment Trust (REIT) Association disagrees, saying the provision of high-speed broadband services is among many of the value add-ons property owners consider in making their rental space attractive.
The association represents all 30 JSE-listed property companies. It is the 8th-largest Reit market in the world.
"(Broadband) is a factor that every landlord considers among many things that will make (property) attractive to tenants," says SA REIT Association chairman Laurence Rapp.
Responding to the suggestion that broadband should be included in offices on par with other utilities such as water and electricity, he says: "It is a possibility — but different revenue would have to apply to what is feasible."
Stanley Muchemwa, projects delivery director at international telecoms consultancy Rubiem Technology, says there is a direct relationship between high-speed broadband and a country’s gross domestic product (GDP). It is estimated broadband will contribute 15.8% to GDP. But he cautions that broadband requires a huge investment in back-hauling infrastructure to provide access.
"Since SMEs are sparsely populated, the return on investment required does not tally with the revenues generated. Traffic generated and capacities required by SMEs are small and they generate smaller revenues as compared with huge corporates," he says.
Telecoms analyst Spiwe Chireka says broadband is critical to economic growth, but is currently "still viewed as nice-to-have rather than a basic necessity".
"While I don’t believe fibre is the answer to broadband, I also don’t believe we have reached that critical point to push it in every building. We just need to be patient until the demand meets the supply," Ms Chireka said.