Lockdown leads to data boom
ROARING INTO DIGITAL AGE: MTN TRAFFIC UP 77%, VODACOM 75%, TELKOM BY 33%
Increase in sales did not necessarily lead to big increases in overall earnings.
On the face of it, the Covid-19 lockdown was an inadvertent blessing for South Africa’s telecom operators.
Unlike other parts of the economy, the telecoms sector had an advantage in that under the national disaster regulations, it could continue to operate.
Operators also had the advantage of the government giving them temporary access to a range of radio spectrum that could facilitate high-speed broadband services.
The operators didn’t have to wait long to see the impact of the lockdown on the demand for data.
MTN SA’s data traffic was up 77% and saw an increase of 14.1% in active data subscribers to 14.2 million, said outgoing group CEO Rob Shuter on an interim results teleconference call on 6 August.
There was a similar story at rival Vodacom SA. “Data traffic doubled in the quarter and usage per smart device grew 75% year on year, and 22% from the March 2020 quarter to 2.2GB per user,” said Vodacom Group CEO Shameel Joosub in July.
Telkom also saw a surge in demand. “Data consumption increased just in the last two weeks of March by over 35% viewed in context.
“It’s the sort of typical growth that we saw in the 11 months between April 2019 and about February 2020,” said Telkom Group CEO Sipho Maseko at the group’s annual results presentation.
Average traffic consumption on Telkom’s network increased from about 94 petabytes (one petabyte equates to about 1 000 4k movies) per month pre-lockdown to about 127 petabytes, which is a 33% increase to date.
“And what were the main drivers of traffic that we saw over the period?” Maseko asked. “Largely, these were digital services, so streaming services.
“You see things like Netflix and YouTube really, really driving high-traffic and bandwidth consumption.
“DStv, the streaming component of that, working from homes or conferencing applications, whether it’s Zoom or Teams or any other applications that were there.”
Operators’ data numbers for this period do not, however, tell the whole story.
Though traffic over their networks was sharply up, it did not necessarily lead to big increases in overall earnings.
MTN SA, for example, saw data revenue rise 16.7% to R7.03 billion for the half-year to end June but it had cut data rates 32.6% since June last year.
The rise in data revenue could not offset the declines in voice, digital, fintech and wholesale revenues. Overall, revenue for MTN SA was down 2.5% to R17.6 billion for the period.
For its part, Vodacom’s Joosub didn’t disclose data revenue for the first quarter, which started on 1 April.
He did say that as of that date it implemented price reductions of 34% on average for its 30-day data bundles, and that “the increased demand more than offset these price reductions during the period”.
It should be noted that the declines in data rates on the part of Vodacom and MTN follow pressure from the Competition Commission to cut prices.
Maseko also did not disclose the financial impact of the increase in data traffic for Telkom. He said the lockdown inadvertently propelled SA as a whole into the digital age.