Data prices still a major hurdle to local SME growth

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We have on more than one occasion remarked on how the COVID-19 pandemic has highlighted the glaring holes when it comes to connectivity in South Africa. This especially when it comes to the education space, but the same rings true for SME growth in SA, with the price of data exacerbating issues.

According to Jeremy Lang, Regional general manager at Business Partners Limited, these high costs are hampering the productivity and profitability on SMEs in the country in particular.

“While this is a well-established constraint for South African SMEs, it became particularly apparent over the recent COVID-19 lockdown, when internet connectivity emerged as an indispensable business tool,” he points out.

Falling behind

Looking closer at data tariffs in SA, Lang also highlights a Research ICT Africa’s Retail African Mobile Pricing (RAMP) Index, which ranks South Africa 33rd out of 46 African countries this year.

With the positive impact that having an online presence, as well as embracing digital technologies can have on SME growth, it has therefore become imperative that high data costs be removed as an impediment for small-to-medium enterprises in the region.

“In addition to these operational benefits, the adoption of digital technology ensures that a business remains relevant among its competitors,” says Lang.

“From cloud services and online tools, to mobile payment software and social media marketing – all of these require internet connectivity to function,” he adds.

Looking at other elements as to why data must fall for SMEs in SA, is the fact that there has been a steady embracing of digital solutions in the country, coupled with a high mobile device penetration locally.

“A recent Statistics South Africa (Stats SA) report shows that over 36 million South Africans out of 59 million now use the internet – and the majority of these people consume content on mobile devices,” highlights Lang.

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“This all suggests that the environment is ripe for innovative digital businesses with a strong online presence,” he continues.

But with the cost of data remaining the hindrance it is, the aforementioned potential is untapped and wasted.

“However, in order to nurture this market and enable new digital businesses to emerge and take advantage of it, the internet needs to be accessible by everybody – not only those who can afford it,” stresses Lang.

In order to make this come to fruition the regional GM is calling for a renewed promise from government to decrease the cost of data, in partnership with the big telcos.

“On the communication infrastructure front, government needs to make good on their promise to bring the cost of data down to much more equitable levels, as quickly as possible. If this can happen, together with more investment in wider fibre reach, access to the digital economy will improve, offering limitless opportunities to those businesses who are able to adapt,” concludes Lang.

Here’s hoping his call, and others like it, do not fall on deaf ears.

[Image – Photo by Alyssa Ledesma on Unsplash]

Robin-Leigh Chetty

Robin-Leigh Chetty

Editor of Hypertext. Covers smartphones, IoT, 5G, cloud computing and a few things in between. Also a keen photographer and dabbles in console games when not taking the hatchet to stories.