How the UK Recession Will Effect Telecoms

We Brits love a good recession. It gives us something else to complain about, other than the weather. (In the interests of transparency, I’m using the royal ‘we’ from the warmth of an early South African autumn.)

At 07h00 GMT today, that’s exactly what we got. A much-predicted recession just in time to arm the Labour Party with another weapon to remove the Tories from power. Not that they needed another one, if truth be told.

Mind you, a recession nowadays isn’t what it used to be. This one will be short, and if you’re going to endure a recession, the UK is certainly the place. A thousand-year-old societal infrastructure will ensure minimal impact. And anyway, after Brexit and Covid the hardy British character of resilience will kick in and we’ll complain, but the pubs won’t empty and the soccer stadiums will still reverberate with capacity crowds.

Past recessions have caused a drop of ARPU (average revenue per user) in the telecommunications sector, and this time around will be no different. But nowadays, nobody is going to use their phone less, or consume less data. Connectivity is an essential service today. During the appalling recession caused by the subprime meltdown in 2008, it wasn’t.

What we are going to do, is determine whether we’re getting the best deals.

We’re going to relook our mobile usage and our data plans. And given the ultra-competitive nature of the UK network operator sector, I challenge any one of the 68 million people who live there to tell me they’re getting the best mobile or data deal right now.

As an operator, you better be sure you have competitive rates and packages, because the holders of 85 million subscriptions will be eyeballing you. They are not going to compromise on their usage during this recession. Which means that if you can’t offer a better deal, you are the weakest link. Goodbye.

And if you think I’m preaching to the converted, you better be pretty confident you won’t be one of the 100+ telco service-related businesses that typically close their doors during a UK recession.

Oh and don’t forget, if you’re a telco operator you’re also in one of the two most disliked sectors in British society, along with banks. So this will be the one area where the Anglo-Saxon tradition of complaining will actually convert to action.

Good luck.

There are other areas of connectivity beyond the consumer market, of course. Like commercial broadband and 5G rollout. But because this recession will be so short, the impact on these will be negligible.

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