COVID-19 Impact on Telecommunication Industry

Novel coronavirus has affected entire world’s economy. Covid-19 outbreak imposed various restrictions on mobility. ‘Social Distancing’ & ‘Self Quarantine’ have become the buzzwords in today’s life. Due to prevailing lockdown across all over the globe, people are consuming most of their time at home and hence using more data for spending their ‘leisure’ time and for doing ‘work from home’ or ‘remote working’. An ongoing shift to remote work, cancellation of various business-related events and growth in online classroom leads to a sharp increase in mobile communication.

COVID-19 puts the telecommunication sector in the spotlight. Coronavirus has created an economic storm which is followed by an economic slowdown. But telecommunication sector emerges as a golden child of this pandemic situation, as streaming websites have shown a spike of 20% in its viewership and overall traffic witnessed a rise of 10%, in April 2020. Remote working, telecommunication technology, video conferencing, and online meetings have become the key enablers for business operations. And video streaming services including Netflix, Disney Hotstar, Amazon Prime, Zee5, and so on have become the key sources of entertainment in the present scenario.

In March 2020, Nielsen company estimated an 85% increase in viewership in streaming websites. On 3 April, Zoom founder Eric Yuan announced that Zoom had over 200 million daily meeting participants in March, 2020 as compared to a maximum of 10 million in December 2019. Verison wireless, a telecommunication company which offer wireless products and services experienced a 10% increase in wireless voice traffic and 25% increase in total voice traffic in march 2020 during lockdown. Comcast Corporation, an American telecommunication company witnessed a rise of 212% in video conferencing, a surge in VPN traffic by 40% and a jump in usage of mobile data over Wi-Fi by 24% in march 2020 as compared to previous year. On 24 March, 2020 Ministry of Home Affairs, the Government of India acknowledged the importance of internet services, telecommunication sector, IT enabled services, broadcasting and cable services by exempting them from the lockdown. However, Network Operation Centers (NOCs) and call centers which is a major part of telecommunication sector are shut down.

In this prevailing lockdown scenario, consumers are consuming more data which increased the pressure on cellular infrastructure as a result broadband download speeds have declined from March globally owing to a strain on the network. Moreover, due to restrictions on movement and manufacturing of goods, 5G spectrum auction is likely to delay which could affect the overall growth of the 5G market and related 5G infrastructure revenue considering the overall telecom industry.

The telecommunication sector witnessed a sharp dip in number of customers purchasing new sim in March 2020. In India, Pre-Covid-19, Cellular Operators Association of India (COAI) indicated that subscribers increased by average rate of 3 million users per months but due to Covid-19, number of subscribers increased in March was less than one million. The telecommunication sector came forward to spread awareness about Covid-19 among its consumers and to provide anonymized data to the government for analytics. This data could be used by government to form a plan for combating the pandemic.

Telecommunication industry is among the few industries that may escape unscratched from the pandemic and the prevailing lockdown. Covid-19 has a positive impact on the telecom industry. Also, growing mobile phone penetration due to coronavirus and emerging fixed broadband is expected to fuel the growth of the telecommunication industry in the coming future.

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