The COVID-19 upheaval and how it will shape the telecom sector

By Rohit Kumar, General Manager – Strategy & Business Development - Communications, Cyient

 The COVID-19 pandemic is impacting the global economy, trade, and industries across the world in unprecedented ways. None of the business verticals are immune to the impact. Businesses are trying to grapple with the changing world situation as the global supply chains have been thrown into flux.

Nations across the globe have urged citizens to practice social distancing, and employees are being encouraged to work from home to prevent the spread of Coronavirus. The economic toll of the lockdown is immense, but there is a silver lining amidst the “gloom and doom” commentary, especially for the communications sector.

As per the data released by the Ministry of Industry and Information Technology of the People’s Republic of China, the revenue of telecommunication services rose by 1.5% in January and February 2020 (during the COVID-19 crisis) when compared to the previous year.

The growth rate in telecom revenues for the first two months of 2020 was the highest in the last 12 months in China, owing to the increased voice and data usage by both retail consumers and business users. Digital media consumption through social media, online gaming, and OTT video streaming platforms were peaking as more people were homebound. It is important to note that the telecom revenues surged despite the drop in new subscriber additions.

While there may be some short-term concessions announced by the regulatory authorities to aid the consumers during this extraordinary crisis but the telecom revenue surge story in China can well be seen across the world as the pandemic rages on. Footfalls at retail stores have dropped to zilch globally, and hence the opportunities to upsell/cross-sell through these channels have also reduced for the Communication Service Providers (CSPs). But they are more than making up for it by promoting their services through digital channels.

As businesses around the world embrace the work-from-home option, the demand for collaboration and conferencing solutions has witnessed a significant uptake. To complement that, technologies such as SD-WAN along with virtualized infrastructure setups provide reliable technical solution alternatives for companies in the new business paradigm of teleworking.

Experts suggest that this is going to be the norm, even post the pandemic period. All this implies that demand and spend on fiber infrastructure are going to explode shortly. To leverage this trend, several CSPs have already announced their intent to bring forward their CAPEX spend and, in some cases, the rollout of 5G infrastructure as well.

They will look to partner with companies who bring in the expertise on faster network rollout and efficient fiber and capacity planning. Besides, companies that can enable Mobile Edge Computing for CSP will get a further boost due to the surging demand for faster content delivery and enablement of ultra-low latency business applications.

It is a futile exercise in trying to predict when the situation will get back to normalcy, but one thing is for sure, THE CRISIS WILL END. However, the world will never be the same again. The crisis has forced people to adopt newer ways of working, and that might become a norm in the post-Covid19 world. The CSPs in the modern age will need to add automation and efficiencies in their processes to make up for the lost time. And hence, companies that have the expertise on Robotic Process Automation and Network Automation tools will gain prominence. Technologies, such as Automation 2.0, will witness increased adoption.

The coronavirus crisis has once again underlined the fact that telecom is the backbone of economic growth, and it will continue to be so in the future.