Collaboration essential to growing digital infrastructure during energy crisis

With the sector being so vital to the economy, individual operators can’t be left to battle their many challenges alone

South Africa is haunted by the spectre of load-shedding and energy shortages that have hurt the lives and livelihoods of millions. Stage 6 load-shedding, battery theft, infrastructure vandalism and sabotage are also seriously hampering telecommunications operators’ ability to invest in networks. This affects network quality and coverage, service delivery and customer satisfaction.

Since the start of stage 6 load-shedding, mobile network operators (MNOs) have spent billions of rands on diesel to run base stations, and replacing stolen batteries and generators whose life expectancy have been reduced from 12-15 years to five years.

Batteries cannot recharge in time and there is no backup. The heavy reliance on diesel increases the carbon footprint, the net effect being that the country’s net-zero climate change targets and the MNOs’ economic, social and governance (ESG) targets will be missed. This should be very concerning to policymakers, regulators, the private sector and society.

Telecommunications operators are at the heart of the South African economy, and are key to our global competitiveness. Immediate policy and regulatory interventions are needed to arrest the impact of the energy crisis on our communications infrastructure. These must include collaboration between policymakers, regulators and the private sector — across the whole economy.

Partnership and collaboration necessitate institutional arrangements that allow for constant communication between policymakers, legislators and the private sector. Load-shedding and energy crisis management require cross-functional collaboration among regulatory authorities for ICT, energy, trade and competition.

Partnerships and collaboration will increase the sharing of expertise across sectors to better address common challenges and determine shared objectives rather than struggling on as standalone authorities. For example, the relationship between ICT and energy, or their collaborative regulation, can enable the following:

● Decentralised energy generation, integrating renewable energy sources;

● Operating and maintaining modern power grids;

● Identifying and rectifying technical and non-technical revenue losses;

● Making power grids more reliable and resilient;

● Integrating renewables, new storage, demand management, e-mobility and the like into the grid; and

● Providing consumers with tailored information to improve their consumption and save energy.

The telecom industry has become a fundamental underpinning of modern society. It can be the key to delivering sustainable economic growth and boosting South Africa’s global competitiveness.

In its 2021 research report, the GSM Association an industry organisation

The nation must protect the goose that lays the golden egg. The telecom industry has become a fundamental underpinning of modern society

representing mobile network operators worldwide — says that “every dollar invested in digital technologies over the past three decades has added $20 [about R370] to GDP, on average”. The UN agency for telecommunications studies, the International Telecommunications Union (ITU), confirms that an increase of 10% in mobile broadband penetration in most countries yields an increase of 5% in GDP.

The International Monetary Fund reports a gloomy economic outlook, nationally and globally. World growth projections for 2023 have been revised downwards to 1.7%, and sub-Saharan Africa’s growth is down to 1.2%. These economic developments, compounded by geopolitics and the RussiaUkraine conflict, have led to tightening financial conditions and fewer investments,

a cost of living crisis and higher interest rates. In South Africa, load-shedding has added to this litany of woes, hitting the country’s macroeconomic performance and GDP growth — especially through its effect on the ICT sector.

In 2022, policymakers and the regulator were upbeat when the auction of highdemand broadband spectrum yielded about R14.5bn from telecom operators. In 2023, the mobile-network operators have spent a collective R50bn on capital development.

Developing the country’s 4G and 5G capacity will bring new challenges, including the large costs of securing more spectrum and of network deployment, as well as the demand for various Internet of Things services by vertical industries.

New services and technologies such as

4G and 5G will provide more than just a traditional, consumer-focused mobile broadband service. They will be multipurpose technologies that enable a diverse range of industrial transformations through cross-industry efforts. Against the backdrop of a gloomy global economic outlook, and South Africa’s worsening macroeconomic conditions, it will be a challenge to construct a supportive policy, legislative and regulatory environment that encourages telecommunications operators to invest in more new technologies and to break down barriers to cross-industry innovation and collaboration.

The national disaster-management regulation on electricity supply is a step in the right direction. Many more interventions are needed to ensure that telecom operators remain resilient during the energy crisis. These should include:

● Deferring spectrum fees;

● Suspending universal service obligations;

● Suspending or relaxing licence compliance and the quality of service to licensees;

● Formulating or amending existing laws to ensure harsh sentences for stealing batteries and vandalising critical communications infrastructure;

● Exploring diesel rebates; and

● Investigating the possibility of tax breaks.

These interventions would help to arrest the national crisis brought on by the combination of an economic recession and electricity shortages. Making them a reality will require close collaboration and innovation among critical regulators. We need co-operation between the Independent Communications Authority of South Africa, the National Energy Regulator of South Africa and the competition authorities to help the country’s networked industries and operators survive the energy crisis and emerge stronger and ready to drive the next phase of our development.