Revenues for telco not commensurate with what it enables during COVID-19

Revenues for telco not commensurate with what it enables during COVID-19

The Telecommunications industry is amongst the few industries that emerged to be a much needed pillar of stability during the pandemic. An average of 21.1% surge in internet traffic across ASEAN countries of Malaysia, Indonesia, Philippines and Thailand, due to the respective lockdowns was cause for Telecommunications companies to assure both consumers and businesses the provisioning of undisrupted connectivity services for the sake of business continuity.

The dependency on broadband connectivity for business continuity was top of mind for all businesses, coupled with the need for consumers to stay connected with their loved ones, Telecommunications providers not only ensured that their infrastructure was able to handle the load, but also began to offer complimentary data, free access to collaboration tools and extended bill payment periods. A survey conducted by IDC had shown that more than 40% of enterprises geared their spending over the past 3 months towards videoconferencing and remote/access tools.

In an end-user sentiment survey of ASEAN end-users, IDC also noted an increase in demand for IoT based services. This is not surprising as some industries such as Transportation, F&B and Manufacturing have needed to find different ways to operate during this period – and therefore, a demand for robotics solutions, contactless payments, and even drone solutions have emerged during this unsettling period. IDC has forecasted that ASEAN’s number of IoT IP connections will grow at a compound annual growth rate (CAGR) or 12.1% over the next 5 years, and will amount to a total of 578 million connections by 2024.

“In spite of the Telecommunications industry playing a critical role during the pandemic, this does not mean they were impervious to the negative impact of it. Revenues for Telcos are still expected to take a hit, especially around areas such as mobile roaming. We anticipate Telcos to rebound strongly, as buying sentiment turns into reality towards the later part of the year”, says Muhammad Zaim, Senior Research Manager, Telecommunications, IDC ASEAN.

(This content is surmised from a press release)

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