Vodacom South Africa’s Managing Director, Sitho Mdlalose, has expressed apprehensions regarding the surging input expenses in the telecommunications industry, which are surpassing the inflation rate.
Mdlalose emphasized that despite Vodacom implementing price increases below the inflation level, the costs related to serving customers are escalating. This circumstance might compel Vodacom to transfer the augmented expenses to consumers, as it has already done with certain price modifications earlier this year.
Mdlalose highlighted that the cost of generating 1GB of data has been rising due to investments aimed at mitigating the impact of load shedding and other contributing factors. Despite endeavors to align price hikes with inflation, Vodacom’s operational costs exceed this threshold, posing persistent challenges. Mdlalose acknowledged that Vodacom has exerted substantial efforts to absorb these expenses, but the situation remains a critical concern that is unlikely to abate soon.
Vodacom Group CEO, Shameel Joosub, highlighted substantial telecom sector investments, with around R11 billion yearly for network infrastructure, countering unreliable electricity supply. High diesel costs add to the financial burden, reaching R350 million last year.
Currency depreciation raises expenses for imported technology in base stations and foreign currency-denominated fees.Mdlalose stressed mobile connectivity importance during power outages for convenience and personal security.
To tackle electricity constraints, Trade Minister Ebrahim Patel introduced block exemptions, allowing operators to collaborate on energy solutions, reducing backup generator costs.
Vodacom partners with IoT.nxt for telemetry data, optimizing power-down during low demand, saving costs and easing Eskom’s strain.
Telecoms sector faces cost challenges while striving for reliable and affordable services.