Struggling South Africans cut back on airtime and DStv

Old Mutual has released its Savings and Investment Monitor report for 2019, which measured the spending behaviour of South African consumers over the last year.

The study collates data from 1,000 interviews amongst employed South Africans living in major metropolitan areas and sorts the results by income brackets.

The report stated that its findings should be viewed against a weakening economic backdrop, with unemployment increasing to 27.6% in the first quarter of 2019 and mass retrenchments at major companies occurring throughout the year.

“Looking now to these 2019 results, we note the continued belt-tightening and the extent to which some households have already cut down as much as they can,” Old Mutual said.

“In order to cope, households are increasingly looking to loans from family and friends or financial institutions to make ends meet.”

DStv subscriptions

For 2019, Old Mutual gave households four options to categorise their spending across various categories. These options are detailed below:

  • Never spent on this or no longer spend on this
  • Already cut back as much as can, so unchanged over the last year
  • Actively cutting back or using cheaper options or cutting back further
  • Unchanged, same as always

South Africans were asked to choose one of these options across various spending categories, including food and groceries, alcoholic beverages, transport, eating out, and education.

When it comes to DStv subscriptions, a large portion of households with lower monthly incomes are cutting back or have already cut back as much as they can on their subscriptions.

Gen Z respondents in particular are most likely to cut their spending on DStv to save on monthly costs, which is likely due to increased familiarity with online streaming services.

Below are the responses from South Africans when asked how their spending on DStv subscriptions had changed over the past year.

Monthly Income Unchanged Cutting back Never incur Already cut back
Below R6,000 15% 20% 46% 19%
R6,000 – R13,999 29% 19% 22% 30%
R14,000 – R19,999 45% 20% 12% 23%
R20,000 – R40,000 51% 21% 8% 20%
Above R40,000 64% 11% 8% 17%

Airtime and mobile data costs

It wasn’t only DStv subscriptions that saw consumers cut back on their spending, however, with many respondents also opting to cut back on their monthly airtime and data costs to try to save money.

This was especially prevalent in lower-income brackets, where cellphone data spend has a larger impact but is still ubiquitous among households.

Among households with a monthly income of less than R6,000, 50% of respondents stated that they had already cut back as much as they could on mobile data costs.

Below are the responses from South Africans when asked how their spending on airtime, data, and cellphone contracts had changed over the past year.

Monthly Income Unchanged Cutting back Never incur Already cut back
Below R6,000 15% 34% 0% 50%
R6,000 – R13,999 18% 41% 0% 41%
R14,000 – R19,999 26% 36% 1% 37%
R20,000 – R40,000 33% 31% 1% 36%
Above R40,000 47% 28% 0% 25%

Now read: DStv – More subscribers and more money

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Struggling South Africans cut back on airtime and DStv