South Africa’s top ISPs reveal the impact of the lockdown on their businesses

Since the lockdown started on 27 March, Internet service providers (ISPs) played a crucial role in keeping South Africans connected.

A fast and stable Internet connection changed from a nice-to-have to a must-have to support remote working, video conferencing, and online streaming.

After the lockdown kicked in, ISPs had to field requests from thousands of people who needed a fibre or fixed-LTE connection immediately.

ISPs also had to deal with a sudden spike in traffic as people who were stuck at home increased their bandwidth consumption.

Afrihost, for example, said they experienced a 62% increase in bandwidth usage in the afternoon and a 27% increase in usage during peak times – around 20:00.

There is only one period where pre-lockdown bandwidth use was higher than now – between 06:00 and 07:30.

This illustrates that people get up later during the lockdown, which is not surprising as no travel time is needed to start work.

The strong demand for broadband access and increased traffic levels during the lockdown was anticipated. The long-term impact on ISPs is, however, still unknown.

To shed light on the impact of the lockdown on service providers, MyBroadband asked South Africa’s top ISPs what they are experiencing.

Subscriber numbers

There was a big spike in ISP subscriptions when the lockdown started, with thousands of new fibre and fixed-LTE subscriptions being added every month.

The economic downturn, however, also resulted in many businesses and residential customers cancelling their subscriptions.

This raises the question of how the lockdown impacted net subscriber additions of large ISPs.

Webafrica chief commercial officer Greg Wright said their subscriber base grew substantially during the lockdown.

They have also not seen a material impact on cancellations or payment defaults relative to pre-COVID levels.

MWEB general manager for product, sales, and marketing Carolyn Holgate said they have seen increased demand for broadband services along with requests for higher line speeds.

“FTTH and fixed-LTE have certainly been the products of choice for consumers and corporates for work from home solutions,” she said.

There was also an increase in the number of customers contacting them to look at alternative solutions because of budget constraints.

“We are keeping a close eye on defaults and are concerned this may increase as the effects of rising unemployment are seen across South Africa,” Holgate said.

Vox CEO Jacques du Toit said their consumer base grew during this period, showing the importance of Internet access for business, entertainment, and research.

He said there were not many cancellations, with customers redirecting their spend away from luxury and non-essential services instead of losing their Internet access.

Supersonic CEO Calvin Collett said they experienced significant growth in signups as well as usage across both their fibre and fixed-LTE products.

He added that they have not seen any change in the number of cancellations during the lockdown.

Cybersmart founder and CTO Laurie Fialkov said their subscriber numbers are up, but their revenue is down.

Businesses in the leisure industry, student accommodation, and hotels are downgrading or cancelling their accounts, while others are defaulting on their payments.

“We have seen downgrades on our FTTB and FTTE services as staff move to FTTH to work from home,” he said.

Traffic volumes

Most ISPs said their traffic volumes remain at similar levels to what they experienced during the first month of the lockdown.

Webafrica’s Wright said they are still seeing average usage per connection climbing, but this may change when the “double the speed promotions” end.

Mweb’s Holgate said traffic volumes have remained high during the lockdown.

“We saw an initial spike in demand in March and April, and that has persisted month on month. Both daytime usage and consumption of streaming services increased,” she said.

Vox’s du Toit said traffic volumes for their consumer segment dropped off slightly in recent weeks, but it is made up by growth in business traffic.

Collett said Supersonic’s traffic volumes have remained consistent since April, which shows that many people are still working from home.

Fialkov said while FTTH traffic increased during the lockdown, FTTB and FTTE traffic has seen a big decrease.

Outlook for 2020

The rest of the year will be tough on businesses, with a depressed economy and a lot of uncertainty.

Despite the tough economic conditions, ISPs remain upbeat about their prospects for the rest of 2020.

Wright said Webafrica expects the surge in demand for high-speed Internet to continue for months to come.

“If anything, the demand will accelerate and we’re well-positioned to take advantage of it,” said Wright.

Holgate expects consumer spending to continue to be under pressure. “Consumer telco services, however, will be fairly resilient as residential broadband services help to keep the economy going,” she said.

“Tough trading conditions are certainly on the cards for all of us. However, the role of connectivity is vital at this time.”

Du Toit said to prepare for the rapidly changing environment, they have realigned their product stack to ensure they are relevant given the current circumstances.

“This is the time to invest in people, grow product and expand our network. If you stop investing now, the consequences will be exponential,” he said.

Collett said they expect usage levels to remain relatively consistent for the rest of the year.

“We as a business have taken some key learnings from this experience and are building internal systems and processes to make the user experience as simple as possible in light of this,” he said.

Fialkov said they have seen massive financial pressure on most of their client base, but people are innovative with many re-engineering their services to find a solution.

“I am quietly optimistic that we are over the worst,” Fialkov said.


Summary

Subscriber numbers
ISP Feedback
MWEB Increased
Supersonic Increased
Webafrica Increased
Cybersmart Increased
Vox Increased
Most popular products
ISP Feedback
MWEB Fibre
Supersonic Fibre and fixed-LTE
Webafrica Fibre
Cybersmart Cheapest FTTH products, Layer 2 services to connect to AWS
Vox Fibre, Office 365, UPSs, Security
Network traffic
ISP Feedback
MWEB Remains high during lockdown
Supersonic High volumes since April
Webafrica Increasing since April
Cybersmart FTTH increased, FTTB decreased
Vox Consumer volumes dropped slightly recently, but business traffic increasing

Now read: Good news from South African ISPs about salary cuts and retrenchments

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South Africa’s top ISPs reveal the impact of the lockdown on their businesses