High prices curb S.African Internet growth: survey

JOHANNESBURG (Reuters) - The number of South Africans with Internet access will rise by just 3 percent in 2007 due to high tariffs, but stiffer competition in the broadband market will boost connectivity by 2010, a survey showed on Thursday.

Technology consultancy World Wide Worx said about 3.85 million people -- just one in 12 South Africans -- were expected to have access to the Internet by the end of 2007, up from 3.73 million last year.

The number of broadband users is expected to more than double by the end of this year as fixed-line monopoly Telkom cuts its prices and persuades existing dial-up customers to upgrade to high-speed services.

The relatively high cost of renting and using a land line, however, means few new users can afford to sign up for a basic dial-up service, the survey said.

"This is the slowest growth we've seen in overall user numbers since the arrival of the Internet in South Africa," said World Wide Worx head Arthur Goldstuck.

Businesses and the government say high tariffs for phone calls and Internet use are deterring investment in Africa's biggest economy and impeding the roll-out of communication services to the poor.

Goldstuck said he expected increased competition in the broadband market as fixed-line newcomer Neotel starts offering services and as city councils start offering wireless high-speed Internet access, which would bring down prices.

"By 2010 we can expect to see a substantially altered connectivity landscape," he said. He said growth would depend on how city councils price their broadband offerings.