COVID-19 Impact on Telecom Sector

COVID-19's Impact on the Global Telecommunications Industry

The COVID-19 Pandemic is perhaps more than any other event in human industry has demonstrated the vital importance that telecommunication sector plays in keeping the businesses, governments and societies running . The global pandemic has limited the human interaction to minimum & people are relying more and more on technology for information and day to day operations.

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Sector Background

Fibers, Telecom Towers, active networks and data centers form the digital infrastructure of telecommunication services industry (mobile & fixed broadbands, telephony services, cloud computing & data centers). Telecom sector still holds promising opportunities in the private sector.

The pandemic forced the users to stay at home and become part of the digitalization process, for this purpose Work from Home (WFH) was introduced.  Telecom sector has remained “mission-critical” to keep the industries running under the lockdown. Here are at least three different ways in which telecom sector has provided extensive support.

 

  • Providing business critical connectivity & resiliency
  • Facilitating Work from Home Arrangements
  • Keeping the individuals & societies connected, informed with access to medical, financial, commercial and other essential services during the mandated lockdown.

COVID-19's Impact on the Sector

From broadband to mobile to datacenter operators all have benefitted from a surge in traffic of data and voice since the lockdowns have been imposed worldwide. As a result, telecom sector has been performing well as compared to the other infrastructure sub-sectors.

During the pandemic telecom sector has been identified and recognized as an essential service and has been exempted from major COVID related restrictions such as stay at home & quarantine requirements. Most of the telecom service providers have benefitted from the short-term increase in data & voice traffic. The reason being that more people are working from home and rely on Telecom Services to meet their daily business requirements.

Increase in traffic growth has resulted in increased reliance on connectivity & digital services. PTA reported an increase of alone 15% in nationwide data traffic.

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Network Usage & Resiliency

  1. Authorities worldwide started imposing lockdowns in the start of March, 2020 forcing companies to manage Work from Home. This resulted in many telcos reporting large spikes in voice and data traffic.
  2. Network reliability is an ongoing focus since the start of lockdown, many incidents have been reported world wide for spikes in connection drop rates, lower audio quality, mitigation is being done to reduce outages because of this.
  3. COVID-19 has caused a huge paradigm shift which has been unthinkable before, most popular being operators across US are borrowing spectrums from Competitors to increase the capacity.

Changes for Customers

  1. Across the globe telcos are taking a variety of measures to improve the customer experience. For example all mobile operators in Pakistan introduced free minutes, SMS & data packages to support online education & jobs.
  2. Many Telcos have been offering networking tools on reduced rates (VPNs, Bandwidth on Demand etc.) in working from home. 
  3. Introduction of Point of Sales (POS) with minimal human interaction.
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Usage of Consumer Data to Track & Contain COVID-19

  1. Data is being used by governments & organizations to track and contain the spread of virus. The biggest example being China where there is highly mobile population, the exchange of data & effectiveness of communication has been essential in in screening & controlling the outbreak.
  2. It is very much likely that more countries will opt for using cellular data to track the spread of the virus. Which might raise questions about data privacy in the future.

Going Forward

An extended pandemic will have an increasing impact on the global economy, affecting the financial health of consumers and businesses and hence long-term demand. Mobile and broadband operators with strong exposure to retail consumers may suffer more in the short-term, but the damage will eventually have an impact throughout the value chain. The impact will hinge on how long the lockdown will last.

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