Telecoms firms disappointed in Sona speech 

The telecommunications industry is concerned that a request that it receive diesel rebates has been ignored after President Cyril Ramaphosa failed to broach the topic in his state of his nation address last week. 

Operators such as MTN, Vodacom and Telkom together spend billions of rand every year on diesel to keep their base stations operational during load shedding. 

The Association of Comms & Technology (ACT), an industry body, last year called on national treasury to introduce a diesel rebate for the ICT sector.

Following Ramaphosa’s Thursday speech, ACT CEO Nomvuyiso Batyi has expressed concern that the president’s failure to mention diesel rebates may mean they will not be included in this year’s national budget. 

“Similar rebates have been issued in mining, agriculture and food processing. Last year, the president mentioned rebates for food processing his Sona address before it was confirmed by treasury in the budget speech,” Batyi told TechCentral in an interview. “He did not touch on rebates for the telecoms sector this year.” 

ACT’s argument for the rebate is based on the rationale that it does not make sense for mobile operators, which burn diesel to keep communications infrastructure powered during load shedding, to pay certain taxes worked into the price of the fuel.

Rebates

These include contributions towards the Road Accident Fund and the general fuel levy, which goes to road maintenance. The agricultural, forestry and mining sectors were granted rebates in terms of the Customs and Excise Act – and ACT said it sees no reason they shouldn’t be extended to the ICT sector. 

With 2023 the worst year of load shedding yet, mobile operators are spending huge sums to keep critical infrastructure online. In a July 2023 interview with TechCentral, Vodacom Group CEO Shameel Joosub said the mobile network operator had spent R350-million on diesel in the previous financial year. In October, MTN announced that it would commit between R4.5-billion and R5-billion to combating load shedding, with some of the money going into batteries and some going to generators and diesel. 

Read: ‘Load shedding disastrous for Vodacom’: Shameel Joosub 

“Power outages continued to pose a significant challenge to our operations,” said MTN South Africa CEO Charles Molapisi in a statement last October. “During the first half of 2022, there were 68 days with load shedding, but this figure nearly tripled to 181 days in that same period this year (2023).” 

Even as network operators spend more money on backup infrastructure, they face an uphill battle protecting that infrastructure against theft and vandalism. According to Batyi, data collected by ACT suggests that criminal elements are involved in the sabotage of critical infrastructure and that they are organised and sophisticated. 

“It’s not only our members that are seeing this; it has been observed with electricity, rail and water infrastructure, too. There is a concerted effort to destroy infrastructure in South Africa, but government has no concerted effort of its own to deal with it,” said Batyi. 

Like most of the Sona speech, Ramaphosa’s mentions of ICT sector were retrospective rather than forward-looking. Batyi acknowledged that the president’s references to changes in the spectrum licensing regime were indeed viewed as successes by the telecoms sector, especially since it led to a decline in data prices. But she described Ramaphosa’s failure to address issues currently plaguing the sector as “disappointing”.

Read: MTN enlists community police forums in war on crime 

“Connectivity is a basic human right, but issues affecting the sector do not seem to be on government’s road map,” said Batyi.  — (c) 2024 NewsCentral Media