Telecom is Weathering the Pandemic Relatively Well: GSMA Intelligence

The telecom sector has not been hit as hard as others by the economic fallout from the coronavirus pandemic, and mobile operators in some hard-hit countries are even flourishing as demand for network connectivity soars, according to a new report from GSMA Intelligence.

 GSMA Intelligence said in its new Global Mobile Trends 2021 report,the organization notes that the World Economic Forum has predicted a 4.4% decline in global GDP in 2020 as a result of the pandemic, with steeper drops in some countries. However, the report goes on to point out that much has changed since 2008 which was before LTE networks were available, and tthat mobile and fixed networks are more in demand than they used to be.

There appears to be a significant split in the impacts on mobile network revenues between developed and emerging economies, where wired infrastructure is often lacking and mobile networks are the primary means of access. Among the five countries with the highest numbers of deaths from COVID-19, the report found that the negative impact on mobile revenues in the U.S. and U.K. is about half the overall GDP impact—worse than tech and internet companies, but far better than retail, travel and hospitality. But in Brazil, Mexico and India, mobile revenue growth appears to be significantly outperforming each countrys economy as a whole. The most striking example is India, where the WEF estimates a 10.3% drop in real GDP for the country, while mobile revenues are up 17.6% year-over-year.

Based on reporting from a number of operators around the world, GSMA Intelligence says that the pandemic has shrunk carriers’ business by between 4-8%. While service revenues have held up fairly well, the report said that financial impacts have come from less roaming revenue due to reduced travel, reduced handset upgrades as retail stores have been closed, and discount and payment holidays afforded to business customers.

The report also pointed out that for AT&T, as perhaps the world’s largest converged telco, the pandemic exposed the vulnerability of media licensing, because the pandemic has resulted in movie theater closures and accelerated direct-to-consumer content distribution.

Network resilience around the world has, overall, been “an out and out positive, enabling work- and learn-from-home shifts. For example, Zoom has become a household name.

GSMA Intelligence found that revenues beyond fixed and wireless connectivity now account for about 20% of operators’ revenues, on average, up from 17% last year. Those services include pay TV, media and advertising, IoT, cloud, security, financial and lifestyle services, and vertical industry-specific solutions.

There is a global consensus that 5G must monetize industry verticals, and perators around the world see manufacturing as the largest B2B revenue opportunity going forward.

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