The R64 billion question – by Michael Jordaan

Ok I get it. Investing many billions of Rands in a 4,5G data network requires some explanation, especially around the benefits to our struggling SA economy.

The best way to answer it is by doing some sums. It won’t be difficult, I promise.

Let’s start with the basics. The World Bank says that for every ten percent increase in the amount of people connected to the Internet, the economy grows by 1,4%.

Adding a new national, mobile data network to the 4 existing ones (Vodacom, MTN, Cell-C and Telkom) increases the potential of the SA mobile Internet by 25% (or one over 4).

As background, less than 5% of SA has a fixed broadband connection but for mobile data the figure is just over 50% of the population. So mobile is by far the most popular way to access high-speed Internet.

If we are conservative and say that this new network will result only in a total increase of 10% (and not 25%) in the number of South Africans that will get broadband access, we should be safe. And it makes the sums even easier because we already know that a 10% increase in broadband access translates into a 1,4% GDP uplift.

Last year our GDP was R 4 545 billion. (Yes I know the figures fit neatly with 4,5G but that is just coincidence). So 1,4% of R4 545 billion is R64 billion. In other words, investing in a new mobile data network lifts our GDP by a massive R64 billion. Now that figures.

 

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