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‘Load shedding eroding attempts to cut data costs’


FITCH Solutions has warned that South African mobile users’ hopes that data costs will decrease soon are slowly being eroded by the impact of load shedding on mobile operators and the economy.

The company said high capital and operational expenditure as a direct result of load shedding has significantly tied the hands of operators in terms of reducing data and voice costs. In fact, it expects that prices will increase if load shedding persists and a long-term solution to the power crisis is not implemented soon.

“Technology-dependent companies, especially telecoms, network operators and data centres, are facing increased capital and operational expenditure as a direct result of load shedding,” Fitch said.

“Operators such as MTN, Vodacom and Cell C have been forced to put necessary measures, such as back-up batteries and generators, in place at base stations across the country, to ensure communication continues and their customers are served during power cuts.”

The Competition Commission this month said it intended to release its provisional report into its inquiry into data prices by the end of this month.

In August 2017, the commission initiated a market inquiry into data services because it had reason to believe that there were features in the sector that prevented, distorted or restricted competition.

Last month, mobile operators warned that load shedding was negatively impacting on the cost of operating their networks.

Eskom implemented rotational stage four load shedding due to a shortage of good-quality coal, diesel shortages, low storage dam levels, poor maintenance and breakdowns of power stations.

Cyclone Idai in neighbouring Mozambique also put further strain on the electricity provider’s capacity due to a collapse in imported supply from the hydroelectricity facility at Cahora Bassa.

The cash-strapped power utility last week announced its winter plan for South Africa to ensure optimal supply for the next five months.

The plan included a maximum of 26 days of blackouts limited to stage one. However, energy expert Ted Blom said Eskom’s plan risked undermining the integrity on the national grid.

“Load shedding is solely determined by the system. If we need to go above stage one, and as high as stage five to protect the system, that’s what a responsible systems operator would do.

“Eskom’s blueprint has moved the chances of a total grid meltdown up by at least 30percent,” Blom said.

Fitch also warned that power blackouts also opened the door for increased criminal activity and vandalism at network high sites and substations during power cuts.

“Operators, such as MTN, have spent over R100million in the past year to deploy security teams to protect these sites and valuable equipment such as copper cables.”