The outbreak of coronavirus is impacting industries and businesses across the world. It has virtually brought the world economy to a standstill with millions of people placed under lockdown and global supply chains thrown into disarray. As the pandemic rages on, manufacturing of smartphones and telecom equipment has taken a hit. Meanwhile, in the face of lockdowns, retail stores are being shut down across the world. As unfortunate as this global medical emergency is, there are few silver linings too. As the work-from-home concept becomes the new norm, all major remote conferencing service providers are witnessing increasing uptake of their solutions. Further, the coronavirus outbreak is compelling traditionally less digitally inclined organisations to ramp up their digital infrastructure. Meanwhile, digital media consumption through social media, online gaming and OTT video streaming platforms is peaking as more people get homebound.
The coronavirus-driven lockdown and social distancing measures have led to higher dependence on digital tools, which in turn is driving demand for telecom services. Further, the financial impact on service delivery is expected to be very minute given the essential nature of communications offerings.
However, the lockdown is expected to arrest 4G subscriber addition and churn while accelerating SIM-consolidation.
It is also highlighted that some distant risks such as the possibility of a prolonged economic slowdown would erode consumers’ ability to spend, and the Indian telecom sector historically bearing disproportionate burden of government finances, which may continue in the current phase.
Further, it is noted that a paradigm shift in consumer behavior is underway in the wake of lockdown and social distancing measures. The lockdown has led to a surge in data demand globally and has triggered an uptick in the consumption of online content.
Such changes are expected to spur data demand structurally, increasing the wallet share of telecom services.
In the times of social distancing, tremendous effort is being made to stay socially connected but physically distant. The telecommunication industry is the invisible force behind the same.
The COVID-19 pandemic has created an unprecedented set of circumstances where people are adapting to newer forms of working and social practices.
The sharp rise in the use of digital tools, including video-conferencing, cloud computing, and electronic payments puts the telecommunications sector in the spotlight in facilitating this new ‘normal’.
As COVID-19 continues to disrupt vital aspects of the Indian economy, it is no alien to the telecommunication sector. India is currently the world’s second-largest telecommunications market with a subscriber base of 1,189.28 million (with 1,168.32 million mobile telephone connections and 20.96 million landline telephone connections).
In addition, due to COVID-19, the net subscriber additions may fall by at least 3 million in March and April 2020 alone.
As COVID-19 continues its rampage, to contain the outbreak, the Ministry of Home Affairs, Government of India, on 24 March 2020, issued a set of guidelines for the lockdown which explicitly exempted telecommunications, internet services, broadcasting, and cable services, these being essential services.
The government-imposed lockdown will result in a steep rise in data traffic on networks. To ease the network congestion, the COAI has asked over-the-top streaming services platforms like YouTube, Netflix, Facebook, and Amazon Prime Video, etc. to reduce bit rates for videos on their platforms in India.
Despite measures taken by various ministries for the smooth functioning of essential services, the ground reality is deeply concerning.
Notwithstanding the government orders specifying telecommunication as an essential service, gaps in information flow and implementation remain a true challenge.
As a result, the workers of telecom companies are facing travel hindrances from police personnel affecting the timely availability of diesel for DG sets for use as backup power sources in case of non-availability of electricity.
The DoT has granted 24X7 permission to mobilize the field staff to be able to reach and access telecom towers sites and work. However, the DoT has expressed concerns that necessary instructions/information have not been passed on to relevant police personnel on duty at barricades en route.
The DoT has also painfully highlighted that there have been several instances of manhandling of telecom personnel by police, which not only present risks to relevant personnel but also maintenance and integrity of telecommunications infrastructure.
In addition, TSPs are facing issues of transportation of telecom equipment, disruption in supply chain and customer support services, as well as staff shortages to cater to the increased demand.
However, as a result of the extraordinary situation created by COVID-19, the Digital India Campaign may well gain newfound momentum.
At this juncture, India needs a flexible and resilient telecommunication sector which has the potential to meet the newer demands and dynamic network traffic.
The current crisis has brought the need for three healthy private operators to serve 1.3 billion people to the fore.
As per a leading data and analytics company, it is also expected that COVID-19 will accelerate developments in advanced digital infrastructure systems, buoying investment justifications for 5G technology. Related investments around AI and machine learning in the post-COVID-19 era are therefore likely to follow.
It is recommended that the TSPs have contingency plans in place to cater to the novel demands of the present situation.
An adequate review of HR policies by TSPs should take place, to ensure that they are suitable and relevant in the current situation such as work-from-home, 24X7 work, and flexible hours at the work, etc. It is commendable that the DoT and the TRAI are working in tandem to effectively address the limitations faced by the TSPs.
The coronavirus (COVID-19) is by far the most significant theme to affect the telecom industry in 2020. However, its effect is going to be short-term. In the post-COVID-19 era, telcos are expected to perform well as the world will be more connected and businesses better prepared for such calamities.
In the long-term, the outlook remains positive, as reliable connectivity becomes a critical commodity.
Coming out of COVID-19, millions of users worldwide will be more connected and more familiar with digital tools. Telco networks will have gained first-hand experience in dynamic network traffic management while businesses and their telco partners will have a better understanding of the challenges of home working. The need for robotic health workers, biometric virus predictors, and AI health management tools will provide new use cases and investment justification for 5G. The situation will provide a shot in the arm for telco innovation around AI and machine learning and a catalyst for app and solution innovation ecosystems.