Vodacom says data traffic has surged during the lockdown
As South Africans stay at home, the country’s largest mobile operator wants additional radio spectrum
SA’s largest mobile operator Vodacom says data traffic on its network has surged as much as 40% during SA’s Covid-19 lockdown, and it has requested access to additional radio spectrum.
On Thursday, the company which has 44-million subscribers in SA, said the rise in internet traffic was due to people working and entertaining from home, but also due to zero-rating certain education, government and health sites to assist during the health and economic crisis.
“We are expecting this trend to continue in the short to medium term as more customers work from home and people using technology to remain connected, educated and entertained,” said Vodacom.
SA’s telecommunications regulator, the Independent Communications Authority of SA (Icasa), has been taking applications for the temporary allocation of radio frequency spectrum to aid communications during the national lockdown.
Vodacom and competitor MTN have both applied for the temporary spectrum allocation, with Icasa reporting last week that it has received about 35 applications. Feedback on this is expected during the course of the week, Vodacom said.
“This will further ensure that network throughput remains optimal for all customers during this period, while being able to expand into certain underserved areas as well,” the mobile operator said.
Spectrum refers to the radio frequencies on which data and information are carried. Vodacom said it is working to ensure the network can cater for additional demand, and has already increased investment into capacity upgrades and batteries, while also stockpiling certain critical supplies.
Where necessary, the operator can offload more of its capacity to Rain’s network in terms of their existing 4G roaming agreement.
Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said Vodacom’s update on Thursday is largely in line with the market’s expectations on its financial position and short-term traffic growth.
“Overall, telcos should be relatively defensive in this environment and are one of the beneficiaries of restricted human movement,” he said. However, the risk to supply of equipment and weaker consumer spend means the sector is not immune if the Covid-19 crisis lasts longer, Takaendesa said.
To date, Vodacom said it has not experienced significant device or hardware supply disruptions that would have negatively effected business. “We are putting further measures in place to avoid disruptions and are working closely with our suppliers and partners to maintain critical supplies during this period.”
Vodacom has stockpiled some critical network components and devices, where possible, to ensure the network can remain available, while ensuring that customers get access to devices while working from home.
As an essential service during the lockdown, and given the increased need for communication as people work and learn from home, the Midrand-based operator warns that “while we expect a short-term increase in demand for our services, medium-term economic downturn is not good for any business.”
Shares in Vodacom ended the day 1.42% weaker on Thursday at R114.60, giving it a market value of R210.39bn.
Update: April 16 2020
This article has been updated with comment throughout.
With Karl Gernetzky