Infrastructure vital to be successful
A DIRECTOR of a top South African Internet service provider warns that as many as half of the country's service providers will not be doing business by this time next year. Most of them will be forced to merge with larger ISPs.
"Despite the race for many South Africans to get connected to the Internet, many existing on-line services and ISPs will be extinct by this time next year," says Anthony Gerada, MD of PiX Internet.
"The results released of a recent international survey shows that of the 4 000 ISPs in the US, many are struggling to cope financially with the technical requirements of maintaining an ISP."
Gerada believes that South African ISPs could soon be facing the same problems experienced by their US counterparts. "Without sound financial backing, many ISPs are unable to invest in the latest equipment, lines and personnel and, as the scramble to get connected to the Internet continues to grow, ISPs without deep pockets will be forced to enter into mergers."
PiX Internet, in which Midmacor invested earlier this year, has upgraded its technical infrastructure and invested R2,5-million in the most technically advanced equipment.
"Another issue detrimental to the survival of ISPs is the lack of available lines and telecommunication structure," says Gerada.
"There are simply not enough lines available in certain areas and additional difficulties are experienced in the exchanges where there is no standardisation. This causes delays as compatible equipment has to be ordered internationally to set up new links. Our new premises cater for 400 lines in the Johannesburg area and another 200 lines nationally, but we are continually applying for more lines. By December, we will have moved all of the Johannesburg lines onto fibre optic links," says Gerada.
PiX had to move premises simply to secure more lines - not enough could be granted at the old site.
Despite the prediction that by 1998 many ISPs will have closed down, Gerada is confident that the industry will continue to grow.