ICASA counts load-shedding costs for telcos

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 09 Apr 2024
Telecoms service providers spent billions in batteries, generators, and other backup power systems in 2023.
Telecoms service providers spent billions in batteries, generators, and other backup power systems in 2023.

Efforts by South African telcos to avoid a connectivity outage during load-shedding have come at a hefty cost, with the total amount spent on batteries reaching R2.5 billion in 2023.

In addition, R930 million was spent on generators during the same period, based on insights from the latest State of the ICT Sector in SA report.

Compiled by the Independent Communications Authority of South Africa (ICASA), the report examines performance and developments in the ICT sector, focusing on three areas regulated by the authority: telecoms, broadcasting and postal services.

The data used to compile the report, notes ICASA, was obtained through a customised questionnaire distributed to key stakeholders covering the period from 1 October 2022 to 30 September 2023. Additionally, data was sourced from the ITU’s 2023 report, Ookla's 2024 data, and Statistics South Africa’s (Stats SA’s) 2022 report.

According to ICASA, it received a total of 98 responses from the Electronic Communications Service and Electronic Communications Network Service licensees, noting that all the major operators have responded to the questionnaire.

The regulator’s report notes telecommunication service providers have invested in batteries, generators, and other backup power systems to ensure uninterrupted service delivery during load-shedding events.

“About 3 268 generators and 150 415 batteries were purchased to counteract the effects of load-shedding by service providers in 2023,” reads the report.

By comparison, licensees spent more on batteries in 2022 (R2.6 billion) than 2023 (R2.5 billion). Meanwhile, there was more spend on generators in 2023 (R930 million) than there was in 2022 (R873 million).

As power utility Eskom has implemented varying stages of load-shedding, companies have had to contend with the impact of rolling power outages on business continuity.

A comparative of how much telcos spent on batteries and generators between 2022 and 2023.
A comparative of how much telcos spent on batteries and generators between 2022 and 2023.

Overall, revenue across all three of the ICASA-regulated sectors declined by 2.21%, dropping from R254.8 billion in 2022 to R249.2 billion in 2023.

This decrease, states the report, was primarily influenced by depressed revenues in broadcasting services, which experienced a downturn in 2023.

Conversely, there was a modest uptick in revenue for the telecoms sector, increasing by 0.07% from R208.1 billion in 2022 to R208.2 billion during the period under review, says the report.

The increase, reveals the report,was because of total fixed internet and data revenue, which experienced a significant increase of 45.85% in 2023.

“These statistics underscore dynamic shifts in revenue streams within the telecommunications industry, indicating a noteworthy rise in the demand for fixed internet and data services alongside decreases in traditional fixed lines and mobile voice services.

“For the period spanning five years, the overall revenue in the telecommunications sector increased by 1.76%. Specifically, during this time, revenue from mobile services increased by 5.20%, and revenue from fixed internet and data increased by 3.30%. However, revenue from fixed line services saw a notable decrease of 18.24% over the same period.”

Telecoms revenue, for the 12 months ending 30th September each year.
Telecoms revenue, for the 12 months ending 30th September each year.

Boom in 5G coverage

The country’s 5G population coverage stood at 20% in 2022. However, it surged to 38.42% by 2023, marking a substantial increase within a year, reveals the report.

“This significant growth indicates rapid expansion and adoption of 5G technology, likely driven by mobile communications services and infrastructure investments. The rise in coverage suggests a growing accessibility to faster and more reliable mobile networks, potentially paving the way for enhanced connectivity, Internet of Things integration, and advanced digital services.

“This upward trend underscores the increasing prominence and potential transformative impact of 5G technology on communication networks and digital ecosystems,” notes the report.

South Africa leads the way in Africa when it comes to 5G network rollout, with expectations that more 5G networks will come online across the continent this year.

MTN, Telkom and Vodacom, for example, are rolling out 5G services in SA, albeit still mostly in the big cities. Mobile data-only network operator Rain was the first telco to activate a commercial 5G network, in September 2019.

National population coverage for 3G, 4G/LTE and 5G.
National population coverage for 3G, 4G/LTE and 5G.

In terms of rural population coverage for 3G and 4G/LTE, all provinces were above 85%, as reported by the licensees in 2023. “In rural areas, only the Northern Cape province does not have 5G coverage in 2023.”

With respect to 3G and 4G/LTE urban population coverage, all provinces were between 97% to 100%. And for 5G coverage, Gauteng was the highest province with 69%, while the Free had just 17% coverage, last year.

Internet access

According to Stats SA’s 2022 General Household Survey, the national percentage of households with Internet access from any location decreased from 77.5% in 2021 to 75.3% in 2022.

However, there was an increase in the proportion of households with Internet access specifically at home, rising from 10.4% in 2021 to 13% in 2022.

“This trend indicates a nuanced pattern in Internet accessibility, with a slight overall decline in general access while the availability of Internet within households notably improved during the same period,” says the report.

In the case of total mobile cellular subscriptions, they increased by 1.78% from 106 million in 2022 to 108 million in 2023. For smartphone subscriptions, the number increased by 1.48% for the same period, to more than 74 million.

Additionally, mobile cellular data users increased by 9.89%, from 37 million in 2022 to 41 million in 2023.

“The increase in smartphone subscriptions means that many people in South Africa have access to the Internet, GPS technology, e-commerce, and mobile banking, etc,” states the report.

* All graphs sourced from ICASA's 2024 State of ICT Sector in SA report.