Telecoms Recognized as Most Resilient Sector amid COVID-19 Outbreak

Telecoms recognized as most resilient sector amid Covid-19 outbreak

In the early weeks of the Covid-19 global outbreak, telecom operators found themselves at the heart of a fast-changing world. More than 20 percent of the world population went into lockdown, catching both the private and public sectors off guard. 

Naturally, the need to stay connected skyrocketed with digital infrastructure becoming integral to human interaction during national lockdowns. 

This is no easy feat, but telcos were persistent and showed agility and decisiveness by offering customers far and wide a plethora of relief packages, while working hard to maintain networks that were under massive demand. 

Worldwide spending on telecoms and pay TV services will reach $1.55 trillion at the end of 2020, a decrease of 1.4 percent year over year, according to the International Data Corp. (IDC). 

The report by IDC highlighted that pre-crisis spending levels will not be reached before 2022.

However, IDC’s research confirmed that the telecoms industry is one of the most resilient sectors of the global economy during the Covid-19 crisis.

“Telcos are coping better with the crisis than service providers in adjacent sectors; communications providers are finally being appreciated as providers of critical infrastructure in times of need,” a recent study done by Ernst & Young stated. 

This is positive news in an era where less announcements of credit expansions, and increased employee layoffs have dominated the news cycle. “Various factors are supporting the sector’s resilience, from subscription-based business models providing essential services, to responsive tariff-plan adjustments offering fairer deals for increased usage,” the study added. 

Keeping the wheels moving

While major industries far and wide greatly suffered in the Coronavirus era, telcos stepped up and were able to keep the worldwide economy moving. With tools such as Zoom, Webex, Hangouts, and many other collaborative working software, businesses kept running in the foreground. 

Telecom operators, backed by governments, took the lead by removing data caps worldwide to help businesses and people stay afloat regardless of what their activities are. But still, the world saw a fall in share prices of telcos and the hardest-hit companies were in China as they were the first ones to experience the epidemic.

Focused sense of investment

It comes to no surprise that telcos far and wide are beginning to narrow their field of investments toward more home-bound solutions and applications during this era. 

“Right now, telecom operators doing some load shifting inside their core networks, from a capacity standpoint, over towards home broadband usage. I could see them investing more in those home residential broadband services because you’re going to have to treat a lot of these like business connections. It’ll be interesting to see how they handle that,” AT&T CEO, John Stankey, was quoted as saying at a conference in July. 

In addition, many experts in the telecoms industry have stated that the Covid-19 pandemic has not hindered efforts for 5G rollout, since telcos and governments are steaming ahead with operations. 

Getting worse before getting better

Operator predictions have estimated that the negative impact will persist, but not at the same magnitude. Revenue in the Americas, the largest regional market, is forecast to decline by 0.5 percent in 2020. 

However, further down the line, Europe, the Middle East and Africa and Asia Pacific are also expected to recover somewhat more slowly than the Americas because the customers in emerging markets are expected to remain cost-cautious for a longer period of time.