Value-for-money the name of the game amidst COVID-19 – Michael Jordaan

Any company that provides a lot more value to customers will thrive in the tough economic environment which will prevail after the lockdown is over.

This is the view of Montegray Capital CEO Michael Jordaan, who was speaking to MyBroadband about the changes in the IT and telecoms industry amidst the COVID-19 pandemic.

Jordaan said the lockdown restrictions have accelerated many trends that were already happening, such as remote working, online education, and ecommerce.

Many companies have fast-tracked their move to cloud infrastructure and automation, while streaming services like Netflix and Showmax are experiencing a historic spike in usage.

This is accompanied by a rapid growth in Internet data usage – both on fixed and mobile networks.

“Mobile networks that successfully retain their emergency spectrum will benefit significantly and hopefully pass the benefits on to customers through more data price reductions,” Jordaan said.

As a broad principle, he said, all these sectors will have been boosted, although there will inevitably be winners and relative losers within each category.

Ecommerce will be a clear winner as a result of the COVID-19 pandemic, although it was artificially held back because of government regulation during the first 50 days.

Logistics companies, in turn, will grow rapidly – and create many jobs – as many consumers have discovered the ease of online shopping and will have changed their shopping habits.

“Usually the business models that provide more value are those enabled by technology, but can exist in any industry, not just the pure tech companies,” he said.

“Consumers will be under pressure for some time, so value-for-money will be the name of the game and any technology that helps businesses to become more efficient will be in huge demand.”

Impact on economy

The impact of the lockdown’s economic contraction on South Africans’ mortality, or the “years of life lost”, could be 30-times worse than the reduction in mortality due to COVID-19.

This was the stark warning from Pandemics – Data & Analytics (PANDA), who recently commented on President Cyril Ramaphosa’s gradual opening of the economy.

“The proposed two-week timeline for this transition, from level 4 to level 3, is far too long considering the current economic risk,” PANDA said.

The report showed that the lockdown has caused a sharp contraction in production and exchange in the economic system, some of which is likely to recover over years, rather than weeks or months.

It is currently estimated that South Africa’s GDP could shrink by between 10%-15% as a result of the coronavirus pandemic.

Now read: Make sure your business can survive for 18 months – Michael Jordaan

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Value-for-money the name of the game amidst COVID-19 – Michael Jordaan