ICT developments are critical to BRICS growth

Ahead of the 5th BRICS Summit to be held in South Africa on the 26 and 27th of March, we take a look at the importance that technological developments hold in assisting these emerging markets continued growth.

March 19, 2013

By Yaron Assabi, CEO of Digital Solutions Group

Ahead of the 5th BRICS Summit to be held in South Africa on the 26 and 27th of March, we take a look at the importance that technological developments hold in assisting these emerging markets continued growth. Rob Davies, Minister of Trade and Industry, has often stressed the importance of information and communications technology (ICT), saying it is the backbone for the development of business and the economy.1 This statement rings true especially when we look at how some of the major ICT projects are/will prove to have positive effects on the economy and SA as a whole.

South Africa – excited to be included in the BRICS group – is showing further enthusiasm as the super ambitious BRICS Cable project, scheduled to be completed in late 2014, take its final shape. Reports say that when the cable is completed it will be the third longest undersea telecommunications cable in the world covering a distance of 34,000km.2 The cable promises to be another strategic investment as it will encourage faster technology sharing, bolster trade between BRICS economies and the world while also reducing connection costs. Currently the BRICS countries – Brazil, Russia, India, China and South Africa – use hubs in Europe and the US to connect to one another.

Similarly the WACS Cable project, constructed by Alcatel-Lucent, now links South Africa with the United Kingdom along the west coast of Africa. The cable has had profound impacts on the ICT sector, including greater access to information and communication that enhances business connections, improve livelihoods and even opens up new employment opportunities, which in turn, stimulates greater investment in the country.

Despite all these investments – South Africa’s ICT sector does face various challenges. All though telecom providers are reducing costs and tariffs – South Africa, when compared to other BRIC nations, is still faced with higher usage costs, weak ICT literacy and low PC ownership.3

In response to these challenges Government has decided to place ICT expansion as a key priority. Just recently, Pravin Gordhan noted investments into two telecommunications investments which will amount to R14billion this year.4 Also at the receiving end of investment is the Department of Science and Technology who are scheduled to receive R2billion to support the Square Kilometre Array (SKA) Project – which once completed will be used to develop skills in the technology space.

South Africa’s telecoms industry is becoming highly competitive, yet still requires significant infrastructure investments to enhance overall functionality to match the progress of other BRIC countries. The fact remains that South Africa has been chosen to form part of the BRICS economy demonstrating that our commitments to growth and development have been noted. The time is now – as we serve as an important getaway to the continent as well as a valuable channel between the South Africa and Western worlds.