eThekwini MetroConnect: Broadband for the Community

Abstract

In the early 2000s, the eThekwini Municipality (the City) embarked on a strategy to turn Durban into a ‘Smart City’. As availability and quality of ICT infrastructure was the prerequisite for achieving this goal, the City started laying a next-generation fibre optic cable network throughout the municipal area. In October 2008, the City launched MetroConnect, an initiative aimed at selling the excess capacity on its network to Internet service providers (ISPs) at a wholesale price.

In March 2010, Jacquie Subban, head of the geographic information and policy unit of the eThekwini Municipality, knew that the real challenge of rolling out municipal broadband to all the businesses and citizens of the area still lay ahead. She wondered whether she would be able to maintain the momentum of municipal broadband roll-out and, if she could, by when all the citizens of eThekwini would have access to affordable connectivity?

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1 Characteristics of a Smart City

Smart Economy (Competitiveness)

Smart People (Social and Human Capital)

  • Innovative spirit
  • Entrepreneurship
  • Economic image and trademarks
  • Productivity
  • Flexibility of labour market
  • International embeddedness
  • Ability to transform
  • Level of qualification
  • Affinity to lifelong learning
  • Social and ethnic plurality
  • Flexibility
  • Creativity
  • Cosmopolitanism/open-mindedness
  • Participation in public life

Smart Governance (Participation)

Smart Mobility (Transport and ICT)

  • Participation in decision-making
  • Public and social services
  • Transparent governance
  • Political strategies and perspectives
  • Local accessibility
  • (Inter-)national accessibility
  • Availability of ICT infrastructure
  • Sustainable, innovative and safe transport systems

Smart Environment (Natural Resources)

Smart Living (Quality of Life)

  • Attractiveness of natural conditions
  • Pollution
  • Environmental protection
  • Sustainable resource management
  • Cultural facilities
  • Health conditions
  • Individual safety
  • Housing quality
  • Education facilities
  • Touristic attractiveness
  • Social cohesion

Source: Smart Cities – Ranking of European Medium-sized Cities, Centre of Regional Science, Vienna UT, October 2007, available www.smart-cities.eu (accessed 11 April 2010).

Exhibit 2 Explaining Networked Readiness

The Networked Readiness Framework is a composite of three components: the environment for ICT offered by a given country or community, the readiness of the community's key stakeholders (individuals, businesses, and governments) to use ICT, and finally the usage of ICT amongst these stakeholders.

The framework is based upon the following premises:

  • there are three important stakeholders to consider in the development and use of ICT: individuals, businesses, and governments;
  • there is a general macroeconomic and regulatory environment for ICT in which the stakeholders play out their respective roles; and
  • the degree of usage of ICT by (and hence the impact of ICT on) the three stakeholders is linked to their degrees of readiness (or capability) to use and benefit from ICT. 1

Figure 1. Networked Readiness Index Framework.

Source: The Global Information Technology Report (GITR) 2003–2004: Towards an Equitable Information Society, available http://www.infodev.org/en/Publication.15.html (accessed 29 March 2010).

Figure 1
Note

1. GITR 2003–2004, op. cit.

Exhibit 3 GITR Networked Readiness Index Rankings for 2003 and 2009

Source: The Global Information Technology Report (GITR) 2003–2004: Towards an Equitable Information Society, available http://www.infodev.org/en/Publication.15.html (accessed 29 March 2010).

Figure

Source: The Global Information Technology Report (GITR) 2008–2009: Mobility in a Networked World, available www.mcit.gov.eg/general/global%20it%20report%202008-092009331155142.pdf (accessed 1 April 2010).

Figure

Exhibit 4 Breakdown of Networked Readiness in South Africa for 2003 and 2009

Rank

2003

2009

No of countries measured

102

134

Environment Component Index

33

39

Readiness Component Index

46

56

Usage Component Index

33

63

Source: The Global Information Technology Report (GITR) 2003–2004: Towards an Equitable Information Society, available http://www.infodev.org/en/Publication.15.html (accessed 29 March 2010) and The Global Information Technology Report (GITR) 2008–2009: Mobility in a Networked World, available www.mcit.gov.eg/general/global%20it%20report%202008-092009331155142.pdf (accessed 1 April 2010).

Exhibit 5 Cost of Telecommunications in South Africa

The South Africa Foundation commissioned a survey to compare South African telecommunications against a best-practice international peer group of developing and developed countries, which included: Canada; Hong Kong; Israel; Norway; Singapore; Sweden; South Korea; United States; Brazil; India; Malaysia; Morocco; Philippines; and Thailand.

The findings showed that South Africa had:

  • the most expensive broadband of all 15 countries sampled, and the broadband was more than nine times as expensive as the cheapest country surveyed;
  • the most expensive domestic leased lines of 12 countries surveyed – 100% more expensive than the average price sampled, and almost 15 times more expensive than the cheapest country surveyed;
  • the most expensive international leased lines of 10 countries surveyed, with the prices almost three times that of the next most expensive country and 31 times more expensive than the cheapest country;
  • the most expensive ADSL broadband of all 15 countries sampled, and the ADSL fee was eight times as expensive than the cheapest country surveyed;
  • the highest ISP fees [purchasing power parity (PPP)-adjusted], or five times as expensive as the cheapest fees of 13 countries surveyed;
  • the most expensive business peak local voice calls – almost 200% more expensive than the average cost – of the 15 countries sampled;
  • the second-most expensive business mobile-to-fixed calls – almost 100% more expensive than the average price – of the 15 countries sampled;
  • the fifth-most expensive, and 14% cheaper than the average price, for international business calls of the 15 countries surveyed;
  • the third-most expensive or 130% more expensive than the average price (PPP-adjusted) for off-peak local retail voice calls of 14 countries surveyed; and
  • the third-most expensive or 100% more expensive than the average price (PPP-adjusted) for off-peak mobile retail voice calls of 15 countries surveyed.

Source: Telecommunications Prices in South Africa: An International Peer Group Comparison, South Africa Foundation Occasional Paper No. 1/2005, available www.businessleadership.org.za/documents/12568Telecomm_web.pdf (accessed 29 March 2010).

Exhibit 6 eThekwini Demographics, Economic and Standard of Living Indicators for Various Years

Estimated population (2005)

3 161 844

Average annual population growth rate

1.56%

Economic indicators:

Gross value added (GVA) (2004 1 )

R122 116 536

Percentage of national GVA (2004)

10%

Sectoral composition of GVA (2004):

Manufacturing

26%

Finance

21%

Services

18%

Commerce

15%

Transport

14%

Construction

3%

Energy

2%

Agriculture

1%

Mining

0%

Annual employment growth (2001–2004)

2.28%

Percentage of national employment growth (2001–2004)

8.15%

Growth in formal employment (2001–2004)

2.12%

Growth in informal employment (2001–2004)

5.02%

Total unemployment (2004)

697 351

Unemployment rate (2004)

28.09%

Percentage of national unemployment (2004)

7.81%

Population living below the minimum living level (MML)

1 046 053

Percentage of persons under MLL in SA

4.44%

Number of households (2005)

861 540

Households without formal shelter (2004)

213 465

Average size of households (2005)

3.67 persons

Households with electricity (2001)

79%

Households without access to an on-site water connection (2004)

37%

Percentage increase in the number of households grouped in living standards measure (LSM) 1–2 (2002–2004)

15.32%

Human development indicator (2005)

0.68

HIV/AIDS infection rate (2001)

34.7%

Population with no schooling

18.4%

Population with matric or equivalent

18.3%

Population with a degree

1.4%

Population with postgraduate education

0.7%

1 Gross value added (GVA) is similar to a regional GDP [or Gross geographic product (GGP)] and excludes taxes and subsidies.

Source: Compiled from information in the State of the Cities Report 2006, South African Cities Network website, available www.sacities.net/2006/state_of_cities_2006.stm (accessed 15 March 2010), and eQuality of Life Durban 2005, available www.durban.gov.za/durban/government/munadmin/media/publications/qolife/qof (accessed 15 March 2010).

Exhibit 7 The Architecture of the eThekwini Network

Figure

Source: eThekwini MetroConnect: Service for Service Providers, available www.durban.gov.za/durban/services/images-and-documentation/metroconnect.pdf (accessed 16 February 2010).

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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