Vodacom leans heavily on Rain as data traffic soars 40%

Vodacom said on Thursday that data traffic flowing across its network in South Africa has jumped by as much as 40% as a result of the lockdown and work-from-home measures introduced by many businesses.

The sharp rise in demand compared to pre-lockdown levels has also been driven by people using the Internet to keep themselves entertained as well as the company’s decision to zero-rate a range of education, government and health websites.

“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,” the company said in a note to shareholders.

It said its engineers are ensuring that the network can cater for additional demand and, where necessary, it has offloaded more capacity onto the 4G/LTE network built by roaming partner Rain.

“This allows for capacity alleviation on the Vodacom network. In order to increase the resilience of our network, we increased investment into capacity upgrades and batteries already in March and will continue with this to handle increased traffic and ensure availability.”

On Wednesday, Vodacom said it had “significantly accelerated” investment in its network in South Africa in recent weeks to cater for rapidly growing demand for mobile and fixed Internet access during the national Covid-19 lockdown.

Balance sheet

“Over R500-million will be spent over a two-month period to add network capacity and increase network resilience during the lockdown period and to help cope with any possible load shedding,” it said.

“The longer-term effects that lockdowns across the globe will have on the world economy as well as the South African economy remain unknown. While we expect a short-term increase in demand for our services, a medium-term economic downturn is not good for any business. We are attempting to manage the crisis in a responsible and sustainable way to ensure we minimise financial impact.”

It said its balance sheet remains “well managed”. Short-term debt was refinanced during the financial year ended March 2020 and repayment periods were extended.

“Vodacom has no significant debt repayments due during the next 12 months. The company continues to monitor its debt exposure between fixed and variable rates to ensure a balanced portfolio in an uncertain and volatile environment,” it said.

“To ensure that short-term liquidity can be met and volatility absorbed, existing committed facilities with banks have been doubled by converting shadow facilities to committed facilities resulting in a total of R8-billion in committed facilities.”  — © 2020 NewsCentral Media