Vodacom Group CEO Shameel Joosub said on Monday that sustained load shedding has been devastating for the South African economy and the telecommunications industry.

South Africa’s energy crisis played a part in Vodacom Group’s 6.4% slide in full-year earnings per share.

Higher interest charges, Ethiopia start-up losses, merger and acquisition costs, and higher inflation across its markets also contributed, Joosub said.

Since 2020, Vodacom South Africa has spent more than R4-billion on backup power solutions such as batteries and generators, and a further R300-million in the past financial year on additional costs for diesel, security and maintenance.

The group responded to South Africa’s growing load shedding with increased investment in power resilience to ensure network availability and this contributed to an accelerated demand for data, which grew by 45.4% year on year in the fourth quarter.

Joosub said that sustained load shedding has been devastating for the South African economy and the telecommunications industry. “The power situation is critical. It’s been disastrous for us. Networks run on power and many of our customers don’t realise this – they just experience dropped calls and frustration, and that’s why we’ve invested R4-billion to cope with the crisis. As a result, we’ve been able to maintain 94% [network availability] even at stage-6 load shedding.”

Eskom deal

He said a deal between Vodacom and Eskom is one of the company’s responses to the power shortage.

“We remain confident that the ‘virtual wheeling’ pilot project we’re pioneering with Eskom will be signed off in the near term and that this will have a significantly positive impact on the country’s power grid. Ultimately this will affect the over 20 000 towers across the industry that require a reliable power supply to operate optimally,” he said.

The group is committed to spending 13-14.5% of revenue on its networks. It will invest R60-billion on its South African network over the next five years, having invested about R50-billion in the past five years.

In remote areas of the country, where load shedding has a disastrous effect on every aspect of life, Vodacom’s purchase of a joint venture stake in South African fibre company Maziv (the parent of Vumatel and Dark Fibre Africa) is expected to assist in narrowing the digital divide.

Read: Vodacom full-year profit slides 6.4%

It hopes to allow affordable access to connectivity in some of the most vulnerable parts of the country through an ambitious fibre roll-out programme, he said. The joint venture will house the material fibre network assets of Vodacom South Africa and CIVH, having received Icasa approval in October last year. However, the transaction remains subject to the Competition Commission’s ongoing approval process.