Outgoing Telkom chairperson Sello Moloko said yesterday that the mobile operator was deeply concerned about South Africa’s energy crisis, which dampened growth prospects and threatened to delay the development of a local digital economy.
In Telkom's 2023 integrated report, released yesterday, Moloko said funds that would have been spent on improving network coverage would now be spent on securing consistent, alternative power.
“The telecommunications industry provides essential services in a nation where landlines are rare, but nearly 80% of citizens have mobile internet access.
“As we provide these essential services, we believe we should qualify for similar fuel rebates applicable to the agriculture, mining, and manufacturing sectors,” he said.
Moloko said load shedding had significant cost impacts for Telkom. In the 2023 financial year, Telkom used over 23.1 million litres of diesel and spent more than R650m to keep its network sites online, including replacing and installing new batteries.
“Providing a consistent quality of service is challenging during the higher load shedding stages when our back-up batteries cannot recharge fully. Like other industry players, we have also experienced a spike in theft and vandalism of our infrastructure,” Moloko said.
According to Moloko, together with Eskom, Transnet, and Prasa, Telkom combated economic crippling through the Economic Sabotage of Critical Infrastructure Forum.
“The forum, established in 2020, has made good progress. This includes the creation of a specialised multi-disciplinary unit to address economic sabotage, extortion at construction sites, vandalism of infrastructure, as well as a police task team on cable theft and damage to essential infrastructure,” he said.
Moloko said Telkom had ramped up its mitigation measures to keep customers connected.
“Through reprioritising capex, we are deploying better and more resilient energy solutions to our key sites and implementing measures to protect our infrastructure better.
“The group has a power outage preparedness plan that covers all scenarios from Stage 1 to a total blackout. This plan has effectively mitigated the impact of load shedding on our operations, and is continually reviewed to ensure its adequacy,” he said.
Looking ahead, Moloko said South Africa had a unique set of challenges, including weakening growth prospects and crippling unemployment.
“While the economy rebounded post-Covid-19, our outlook is weighed down by persistent load shedding, which negatively impacts the local economy, including food prices.
“Consumers’ disposable incomes have been eroded by inflation and recurring interest rate hikes. They consider their costs and discretionary spending carefully, including scrutinising their mobile and data expenses,” Moloko said.
He said in addition, the local competitive landscape was fiercely contested, with well-resourced larger competitors investing in their data capabilities and newer, agile players disrupting the data space.
“Increased competition means that we need to work harder and smarter to win market share,” he said.
In November 2022, Telkom advised its stakeholders of Moloko's intention to step down as an independent non-executive director and chairperson of the board by March 31, 2023. On March 27, Mvuleni Geoffrey Qhena was appointed as the incoming chairperson, effective April 1.
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