South African telcos demand tax relief as power cuts bite
South African mobile operators are calling upon the government to consider a diesel rebate to ensure the high cost of fuel does not unduly burden the sector's commercial operations.
The mobile operators under the industry body, the Association of Communications and Technology (ACT), are ‘deeply concerned’ about the worsening status of power cuts in the country.
ACT, which is chaired by Shameel Joosub Vodacom Group CEO, has suggested several steps the government can take to mitigate the effects of power cuts on the sector and economy, key among them is a diesel rebate.
South Africa, the second-largest economy in sub-Saharan Africa, is facing crippling power cuts, which have pushed mobile operators to increase their use of diesel to run generators to try to enable continuous, uninterrupted access to networks.
The extent of power outages in the country remained elevated, with 90 days of power cuts during the first quarter of this year, compared to 14 during the same period in 2022.
ACT is demanding a tax relief on diesel, saying: “Our members have been forced to reallocate their annual expenditure to deal with loadshedding, which is unsustainable in the long term, given the high cost of diesel.”
Other measures the organisation wants to see include ‘compelling the Department of Trade, Industry and Competition to urgently publish the block exemptions regulations to allow competitors to coordinate on finding solutions to the loadshedding crisis, such as collaborating on using common power sources and sharing security on co-located sites’.
ACT also wants the government to designate the industry, in terms of The Critical Infrastructure Protection Act 8 of 2019. In a statement, the trade body says it wants government to acknowledge the industry’s ‘importance as a national strategic asset that society relies heavily on’.
In addition, the organisation has asked government to provide regulatory relief, which includes allowing mobile network operators to temporarily increase their network capacity through the provision of temporal spectrum. It is also seeking the relaxation of regulatory obligations, which it says are arduous to comply with in the current environment.
ACT says it is ‘deeply concerned about the worsening status of loadshedding’ in the country.
It adds: “Heightened and sustained levels of loadshedding in recent times have already resulted in a record quantum of energy shed by South Africa’s power utility Eskom in a calendar year – and we’re yet to reach halfway through 2023.
“Invariably, loadshedding is more severe during the colder months, which means that the impact on an already hard-hit Information and Communication Technology sector is likely to worsen.
“This will make it increasingly difficult for mobile network operators to keep people and businesses connected – despite having made substantial investments in back-up power solutions to improve network resilience during loadshedding.”
Naturally, ACT says, these investments could have been better spent on accelerating rural coverage, fast-tracking 5G adoption and further addressing the cost to communicate in South Africa.
“It is crucial that the government and regulators take immediate and effective action to address the power crisis, network security, as well as the issue of economic sabotage of physical infrastructure, by outlining a comprehensive plan to address the problem,” says ACT.
As the Minister of Communications and Digital Technologies hosts his inaugural budget vote speech today, the organisation says this will provide an ideal opportunity to address some of the issues for the sector to move forward.
“As an industry association, we call on all relevant authorities to take urgent and decisive action,” says ACT.