Impact of COVID19 on Telecom Sector

Mohmad Iqbal Marazi

                        Iqbal Marazi

The COVID19 pandemic – perhaps more than any other event in human history – has demonstrated the critical importance that telecommunications infrastructure plays in keeping businesses, governments and societies connected and running. Due to the economic and social disruption caused by the pandemic, people across the globe rely on technology for information, for social distancing and working from home.

The telecommunications sector has seen tremendous importance and technological advances over the past few decades, with mobility, broadband and internet services growing in capability and reach across the globe. The International Communication Union (ITU) estimates that there were over 4 billion internet users at the end of 2019. The telecommunications industry consists of digital infrastructure such as fibre, towers, active networks, telephony, video and e-commerce services, etc. The sector has remained ‘mission-critical’ to keep economies moving under the lockdown in at least three different ways:

1) Providing critical connectivity to businesses

2) Facilitating work-from-home arrangements

3) Keeping individuals and societies connected and informed with access to medical, financial, commercial, and other essential services during isolation

COVID19’s IMPACT ON SECTOR

Many telecom players – from broadband to mobile to data centre operators – have benefitted from a surge in the traffic of data and voice, as a result, the telecommunications sector performed well compared to other sectors during the COVID19 pandemic. In sharp contrast to many other industries, the telecommunications sector was exempted from main Covid19-related restrictions such as stay-at-home, quarantine requirements and so on and was recognised as an essential service. Some telecommunication companies have been strengthened by the short-term spike in data traffic and increased use of broadband and internet services, as more people were working from home and relied on video meetings. As a result, the telecom sector remained acyclic throughout the crisis.

 COVID19’s PANDEMIC CHALLENGES

The long-drawn pandemic has taken its toll on telecom sales and distribution networks, especially considering that the footfall of customers at direct franchises has been a major revenue source for the longest time. In many regions, the telecom sector is still reeling from the social distancing measures which has caused an abrupt disconnect between the retail Point of Sale (POS) and subscribers.

As the pandemic restrictions loom over telecom operators, they experience a growing need to develop a robust digital ecosystem, the vulnerability in their existing systems. In an effort to stay resilient in the face of future inevitable events, like the COVID19 pandemic, it is pivotal for telecom companies to increase investment in digital transformation solutions for S&D. Even though many telecom companies are moving towards digitization to bounce back post- COVID19, the inconsistency and lack of synergy in overall sales and distribution (especially across direct and indirect channels) has impeded their growth.

The author is a PG student of economics at HNB Garhwal Central University Uttrakhand. He can be reached at iqbalmarazi999@gmail.com