Subscribe
  • Home
  • /
  • Business
  • /
  • ICT sector will be hardest hit by power crisis

ICT sector will be hardest hit by power crisis

Johannesburg, 12 Feb 2015
SA's ICT sector faces lower revenue, rising prices and retrenchments amid the ongoing and unpredictable power crisis.
SA's ICT sector faces lower revenue, rising prices and retrenchments amid the ongoing and unpredictable power crisis.

SA's ICT sector is likely to be hardest hit by the ongoing and worsening scenario Eskom's power crisis has the country wrapped in, with consumers feeling the effects in the long-term.

This is according to industry watchers, and comes in the wake of unpredictable load shedding and talk of a total blackout of the country's electricity system, with little reassurance from the state's power utility.

Absa Investments analyst Chris Gilmour says a national blackout would likely impact the ICT sector more than any other - a reality that would adversely affect the economy, due to the country's heavy reliance on ICT. He says a total grid failure would mean "everyone is kaput. It's game over."

Gilmour adds entities would need at least two weeks' worth of diesel supply to keep generators on, because batteries will dwindle. "The end result will be catastrophic; communications will grind to a halt."

Although Gilmour says the probability of a total grid failure is currently slim, this risk would increase in winter as SA is more vulnerable this year than previously. He notes some engineers put the potential of a total failure at between 25% and 30%.

Gilmour says there will be a huge cost to the economy if ICT systems are offline for two weeks, but cannot quantify the damage. "I don't even know how you measure that."

Consumer cost

Ovum analyst Richard Hurst says ongoing load shedding will place additional strain on the country's ICT infrastructure and the ability of operators and service providers to sustain contingency plans. The end result, he says, will be felt in consumers' pockets.

"Operators and service providers have put contingency plans in place, data centres and certain network infrastructure will have generator backups, but the key will be the ability to maintain this state of reliance on the alternative source. An example would be the need to procure large amounts of diesel.

"All of these contingency plans will naturally come at a cost, which will be passed on to the end-user - be they consumer or enterprise."

Mutual Financial Analysts CEO Anthony Williams says his call centre operation has already been hard hit by rolling blackouts. Williams says a total grid failure would cause job losses, because he would have no choice but to lay off staff.

Williams says even the current situation, which has seen several successive days of load shedding, is costing his business millions in lost income and productivity each day. He explains he is unable to install a generator because of the long waiting period, and adds the cost - which runs into millions - means he would have to cut costs by laying off staff.

Mobile bane

SA's mobile operators say, while they have adequate measures in place to deal with load shedding, prolonged outages significantly curtail their ability to provide a decent network experience for customers.

Telkom communications head Jacqui O'Sullivan says the company's operational capacity - like many other South African enterprises - has already been impacted by power outages.

Vodacom says, while the operator liaises with Eskom and has contingency plans to deal with each stage of load shedding, once power outages go beyond a certain window, network connectivity is impacted.

Cell C says prolonged load shedding also has a knock-on effect on its equipment. The operator has agreements with Neotel and Teraco, which can fully operate off the grid.

Hurst says a total network failure would have "disastrous consequences" for SA. While he too believes a total national blackout is unlikely, he expects "bits of the network failing and an overall service degradation" due to ongoing load shedding being the foreseeable situation.

Panic stations

ICT expert Adrian Schofield says a neighbour recently suggested South Africans should all get ready for two weeks without power, by stocking up with food, water, fuel and generators.

"I agree that it is good for all of us to be aware of the risk that Eskom will not continue to manage the current problems. However, it will not serve our collective interests if we go into panic mode."

He notes most countries around the world suffer from load shedding in one form or another - even developed ones. "The US had half the country blacked out at one point. Our friends in Africa are used to being without electricity for much longer periods than we are."

He likens the current panic mode to the year 2000 problem. "Do you remember when the year 2000 was going to crash all computers? Do you remember when the 1994 elections were going to end in civil war?

"Instead of planning to go into the 'laager', we should be lobbying our members of Parliament, and our businesses should be lobbying at all levels of government to make sure the appropriate resources are allocated to keeping the lights on."

Share