South African telecommunication company Vodacom has posted significantly better performance than its Sub Sahara Africa (SSA) peers during this coronavirus pandemic. In March, April, and May, Vodacom customers drastically increased their data consumption and offset the negative impact of reduced data prices implemented in March.
Mobile operators in Kenya, Ghana, and Nigeria have also recorded increased internet consumption. However, the companies have suffered a significant decline in voice revenue, which has dampened the growth in data revenue.
Kenya’s telecommunication giant Safaricom is facing some headwinds following the waiver of transaction charges for certain transactions and the overall drop in volume and value of transactions.
A report by Citi Research explains the divergence in telecommunication services spending between South Africa and other Sub Saharan Africa countries.
According to the report, South Africa has a higher number of formal sector workers who are using fixed data to work from home. In contrast, other nations in the SSA region have fewer workers in the formal sector and hence the low consumption of internet services.
In addition, a higher number of workers in SSA countries depend on daily wages and have been adversely affected by the government restrictions introduced to fight covid19.
Citi Research predicts that the demand and spending on telecommunication services from individuals and businesses could emerge as more resilient to the pandemic and yield higher earnings for Telcos.
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