September 21, 2020 COVID-19: How is it Affecting the Telecoms Industry?

A look at some trends in the telecoms industry before COVID-19.

Telecoms are big business these days, especially broadband. And it only looks set to get bigger. In 2019, the value of the global broadband services market was estimated at a whopping $263.4 billion; this year, that figure looks set to climb to $355.6 billion.

But the pandemic arrived and threw a spanner in the telecom works. Data from the International Finance Corporation, a World Bank Group, and experiences with their telecom clients and partners, gives us a taste of the challenges the industry has faced. We also look at a few trends before the whole COVID-19 mess kicked off.

Network and facilities construction disruption

The pandemic has created a shortage in materials, particular materials from China, and has prompted some businesses to halt production temporarily until they can get the materials in. As the world battles to get back to normal, businesses are expecting fewer delays in the shipment of materials for network construction in the second half of 2020.

Potential decline of revenues

In the medium term, revenues may well fall, due to the less economic activity during the lockdown. However, the good news for the sector is that falls in revenue will be a little lower than in other sectors because customers generally telecoms in their business.

That being said… mobile network operators and internet service providers may well have seen a short-term spike in revenues. This is due to the higher data and internet usage that the pandemic has brought on.

Before all this started, however, some interesting trends had been starting to emerge. Over in the UK, the telecommunications regulator Ofcom had been looking into internet infrastructures and pricing and published a report in December 2019. Insiders at the financial services company Deloitte have also commented on internet trends. Here are some findings:

Consumers prefer bundles

Ofcom reported that 85% of the UK’s households buy two or more services from the same provider in the form of a bundle. They explained that bundle prices mattered more to households today than standalone prices.

The regulator also stated that the fact households can save money by signing up for a bundle is a major consideration, as is the fact they also receive just a single bill rather than have to manage several bills. If you don’t currently have a bundle with your ISP, you may wish to check out the broadband deals and see if you could make a saving.

Businesses are striving to harness the power of 5G

Right now, 5G is very much in its “build” phase, according to Deloitte LLP’s Vice Chairman and US Telecommunications, Media and Entertainment Leader, Kevin Westcott. Telecoms businesses are still trying to understand what it can do and how they can make it work for them with a focus on apps. As 5G rolls out more and more, it will generate huge revenues for businesses that provide and sell network and infrastructure services and equipment.

So there are some interesting things happening in the industry just now. The pandemic has created chaos for companies, but it’s not game over, and the emergence of 5G could turn things around for some. Meanwhile, pre-COVID trends may persuade consumers may persuade consumers to look around and make a saving. Let’s see what happens.

Cameron Cox is a retired telecoms consultant who still has an immense passion for his sector. Outside of his tech interests, he enjoys DIY and following the fortunes of the New York Giants.

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