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How is the Telecom Market Fairing Through the Lockdown?

As with many other business sectors, the telecom industry has had its share of ups and downs this year. The periods of the Covid-19 lockdown saw some of the companies’ revenues decline while some performed fairly well.

The telecom ecosystem is undergoing an aggressive and transformational journey using newly developed business models that are intended to bring businesses, institutions, and other industries into a full-fledged digital era.

If we think about the various sectors of innovative technologies that are changing our lives, no doubt, telecommunication is definitely one of them. The business is getting smaller, better, and promises faster speed connection.

Challenging, Competitive, And Promising Future Of Telecommunication

However, the future continues to look challenging, competitive, yet promising for the telecom operators. Telecommunication today includes landlines, wireless phones, and other devices, the internet, and many other components that piece them together to make them function. The internet of things (IoT) is yet another key feature of telecom services that will revolutionize our world. 

As businesses and institutions lean towards digitization which has been accelerated by coronavirus pandemic and lockdown measures, it becomes only necessary to take a closer look at the sector pivoting this rapid innovative evolution.

Remote Work And Its Impact On Telecom’s Importance

With companies and schools resorting to working from home, the industry has become pivotal to the function of society. During the lockdown period alone, the number of people that needed to stay connected for video conferencing, and file sharing increased exponentially and the industry had to step up their game to meet this tough demand, through increased added value services. And so far, it has remained resilient.

Example Of Telecom Italia

In a report, Philipp Nattermann, a senior partner at McKinsey’s London office and the global leader of the telecommunications practice, said: “An example of great resilience from a telco in this crisis is Telecom Italia. It moved from having its call-center agents working in the physical call center, which is the only place they had ever worked, to having 3,500 call-center agents working from home. And within 72 hours, I believe, the entire group of 7,000 agents was working from home.”

With increasing dependence on virtual activities, the telecom sector is faced with a rising demand to move beyond the provision of data for connecting devices. It is now evolving into a key component business partner of other businesses and suited to deliver value-added outcomes for business results.

Can 2020 Telecom Evolution Become Sustainable Development?

The question remains whether these evolutions are merely cosmetic changes that will fizzle away with time or is it a sustainable development designed to bring us to the future of tech. From past history, pandemics have been known to have a lasting impact on society and reliance on technology. But whether the business models would stand the test of time is yet to be seen.

What the industry must ensure is a sustainable demand for their value-added products to satisfy emerging areas of growth and services among enterprises and satisfy customer expectations. This can be done through innovative approaches to developmental changes, cost-effectiveness, and data security of consumers, profit maximization, and socio-economic evaluation of telcos.

Emerging Areas of Growth and Enterprise Services

The majority of firms are advancing into information technology services requiring constant connectivity for their business model output. This has increased the telco service growth focus.

Besides enabling companies to quickly switch to work-from-home mode, telcos have been successful in bringing the healthcare sector to a great milestone. Medical services in a bid contain the fast-spreading virus leveraged internet connectivity and online services in a way that has never occurred before. 

During the pandemic, telcos supported the creation of infection heat maps. These maps helped track the spread of the virus in various countries and regions in collaboration with disease control agencies and other key institutions. 

Telecommunication Companies Partnering With Hospital To Combat Covid-19

Telecommunication companies also partnered with hospitals to create virtual clinics rapidly. Covid-19 infection outbreak stretched healthcare services to a capacity that was difficult to keep up. Virtual medical consultation became a better alternative for face-to-face visits to the hospital. 

For one, the UK’s Royal National Orthopaedic Hospital (RNOH) sees on average 11, 200 face-to-face consultations a month. On average 7% of these are delivered virtually via telephone. In response to the COVID-19 crisis, the RNOH set a target of reducing face-to-face consultations to 20% of all outpatient attendances. 

The result was that “following the target of 80% virtual consultations being set, 87% of consultations were delivered virtually during the first 6 weeks. Satisfaction scores were high for virtual consultations (90/100 for patients and 78/100 for clinicians); however, outside of the COVID-19 pandemic, video consultations would be preferred less than 50% of the time. Information to support the future redesign of outpatient services was collected,” according to a report.

These were initiatives and measures that used to take months but are now taking just a couple of days or, maximum, a couple of weeks.

 5G and Growing Internet of Things (IoT) Value Chain

5G and connected control systems are also known as IoT was already buzzing before the pandemic. With increasing virtual events globally, telecom operators are overcoming geographical distance barriers to power these events with 5G, allowing for seamless, low latency, and high-speed user experience in diverse sectors.

IoT functions when a sensor is put in a device (mobile or static) and connected to a network. Information can then be gleaned from the device or managed. Since millions of devices are going to be used remotely, 5G promises great speed, the kind that no previous generation of mobile technology has offered.

The Use Of IoT Across The Globe

Many companies are already using IoT. Caterpillar, American machinery and equipment firm uses it to help customers understand their fleets of machines and trucks and to further monitor fuel efficiency. One of the leading European aircraft manufacturers, Airbus, is also putting IoT to good use. It is not only applying IoT technologies to its products, but also to the tools its workers use in the manufacturing process.

Limtronik, a major electronics supplier for SME is underway to use the industrial IoT in its factories. The international manufacturer wants machines in their factories to communicate remotely by learning from mistakes and making intelligent algorithms.

“Our project’s target is to make the processes of our machines more efficient as well as to get more concrete statements with feedback about process-specific problems. So the future system will not only capture and document errors via quality reports but also evaluate the reason fully automatically,” said Gerd Ohl, manager of Limtronik.

Telecom Industry Managing Data Security

The foundation of every industry transformation begins with data and its business growth depends on managing the security of the data. 5G is the promised technology that will anchor IoT, mobile broadband, telemedicine, virtual learning, etc and telco are ensuring secure customer trust by building robust security against attacks.

Telco operators understand that embedding security plans into their network is part of the working DNA of the industry. Patrick Donegan outlined six key approaches for companies to secure their data which include: supporting open and transparent testing standards, monetizing security, spending time with enterprise Chief Intelligent Security Officers (CISO), paying more attention to integrity among others.

Profit Maximization and Socio-economic Evaluation of Telcos

According to a report by MTN Consulting, telecom operators had a rough business year in 2020 with a very flat revenue outlook even though they hoped to cut operational costs low. Following the influence of the Covid-19 pandemic, the revenue dropped by 2% year-on-year in the first quarter of 2020, and by the second quarter, it dipped by 5.4%.

But there is always a silver lining on a thick cloud as the massive demand for connectivity due to the work-from-home high demand favored the telecom operators’ nimble competitors in the cloud. In the web-scale sector, revenues increased by over 20% in the first quarter of 2020 year-on-year.

Decline Of Telecom Revenues Worldwide

The revenue For AT&T and Verizon, saw a decline of 4% to 5% range for the third quarter year-on-year even though there are projections that it will stabilize in 2021 and increase by 2%.

Telecom Italia, one of the major operators in Europe, recorded a decline in its revenue. It decreased from 25.87 billion in 2019 to 23.99 billion in 2020 owing to the economic impact of the coronavirus outbreak. There are speculations that there will be revenue will stabilize in 2021 and increase at a CAGR of 2.2% from 2021 to 2024.

The figure in the coming years looks promising for the global telecom enterprise services market as it is speculated to surpass the US$ 583 billion mark by the end of 2030. 




Veronica Ugwu
Veronica Ugwu
Veronica Ugwu is a writer for RegTech Global, with her enthusiasm for tech and business.


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