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Is the COVID-19 pandemic a catalyst for the fourth industrial revolution?

The pandemic has forced businesses to change. For telcos, some of those changes will leave them better able to handle the disruption brought on by the fourth industrial revolution, according to industry veterans Javier Ger and Claudio Saes.

September 4, 2020

6 Min Read
Is the COVID-19 pandemic a catalyst for the fourth industrial revolution?

“Just so everyone knows, we’re all living through a future history class.” – Chris Riddell, futurist and digital technology guru

In March, COVID-19 was officially declared an international pandemic by the World Health Organization. Most governments enforced social distancing and urged families to stay home from work and school. More than ever, they began counting on their Internet to work, study and have leisure time, increasing the demand for video conferences, remote working, e-learning, e-commerce, SVOD services and gaming.

This is taking place concurrently with the fourth industrial revolution. According to the World Economic Forum, this fourth industrial revolution will merge the physical, digital and biological worlds. In its scale, scope and complexity, the transformation will be unlike anything humankind has experienced before.

One of the fundamental differences of this fourth industrial revolution is that in the previous ones the changes occurred outside of the human body; now they will involve it and even happen within it, possibly redefining us as homosapiens. In other words, our world is radically and quickly changing and the pandemic can accelerate everything.

In the meantime, as we're still working through a pandemic, Communications Service Providers (CSPs) are playing a pivotal role worldwide supporting these drastic changes, maintaining people and countries connected. These companies are observing a significant difference in the traffic patterns, including usage increases between 30% to 70% during an extended peak hours period. These increases impact profoundly the capacity planning processes and networks Total Cost of Ownership (TCO).

But the impact is not limited to traffic. Some other factors are:

  • As consumer and small business incomes are severely affected by economic stagnation (which will be most severe since World War II, according to some projections), CSPs are being impacted at their revenues and investment plans. Some consumers won't be able to pay their bills and some governments have taken temporary measures to keep those folks connected.

  • The increased use of the Internet for everything has also necessitated changes to the IT systems and charging systems (e.g., BSS & OSS) and these systems are being re-oriented to these new conditions.

  • To keep up with the new e-learning, remote working scenarios and other consumer new behaviors, security has become a critical issue due to incremental threats.

  • Global supply chain disruptions have also impacted CSPs network deployments.

  • Field operations had to be adjusted to accommodate social distancing and safety measures when visiting consumer homes.

CSPs have been relatively successful in dealing with these outsize and unexpected challenges, but depending on the quarantine period duration, CSPs will have to partner with content providers to relieve the network load and sustain the customer experience.

Also, CSPs are looking for joint offers with partners to provide the best gaming experience, one-stop-shop SVOD catalogs or bundled packages with conference applications and other B2B opportunities like e-commerce, remote medical care, automation or increased processes efficiency. But aren’t these initiatives just a short-term opportunity?

In some ways, from a technological and social perspective, CSPs could anticipate the changes coming from the fourth industrial revolution.

Figure 1:

Will this pandemic accelerate change?
Indeed, the pandemic poses a wide range of challenges. Depending on a series of factors, like the nature of the business, employee readiness, cultural behavior, home environment and tools, some companies will be able to keep up productivity; others won't.

In a mid to long-term situation, workforce transformation requirements will imply support of near-real-time tasks. Some examples include self-driven cars, robots for manual activities, digital twins and holographic work collaboration. AI and biotechnology applied massively to the health sector can help in the current pandemic and many other diseases that today have not treatment. The possibilities are endless, beyond what we can imagine today, although some of them have already been raised (like neural technologies and others).

The industries and commerce from different sectors will drastically change. Restaurants might use drones for delivery, venues could offer remote visits based on VR, and automobile companies may invest in driverless cars for public and private transportation.

All these network and technology requirements that come along with the fourth industrial revolution may be accelerated by the current pandemic. 5G deployments can help to address these unprecedented changes. 5G IS NOT just an access technology but an ecosystem of technologies, working processes and changes that CSPs must support as they transform to Digital Service Providers (DSPs).

We define DSPs as companies capable of responding to changing demands of their clients, fostering and being part of larger ecosystems based on much more complex business models, offering not only connectivity but a broad spectrum of digital products and agile services, therefore increasing the value for their end customers, partners and shareholders.

If we consider the current situation to accelerate the pace of adjusting to the fourth industrial revolution requirements, there will be a substantial economic impact worldwide in degrees that humankind had never seen.

The CSPs are playing a vital role in maintaining us connected, but can they accelerate its transformation into DSPs and play the central part to support these upcoming changes in our society?

"The foundation of everything is in the incessant change; that everything is transformed, in a process of continuous birth and destruction to which nothing escapes.” – Heraclitus of Ephesus

The world is changing. Will the telecom industry change, too?
Although we can’t predict the future, we do believe this worldwide pandemic crisis can act as a catalyst for the aforementioned changes.

The majority of today’s CSPs' cash flows are defensive and, for the most part, structured by a supplier-buyer mindset and the blame game when things go wrong. Suppose the traditional telecom operators don’t try different strategies. In that case they will lose value on the market and potentially be acquired, or struggle for the next few years with average growth.

CSPs which aim for change will require completely different business strategies to be created, instilled in the organization and leaders to drive urgency. They will need to quickly reorient their systems of activities towards various partnerships and modes of operation, probably in several vertical businesses and blurring some boundaries between activities.

Also the need to change not only in CSP networks and technologies but also their operational business processes, cultures and skills. This means enhancing its software-centric and data strategies, implementing artificial intelligence to execute more tasks, securely expose and move network, and applications cloud-based workloads on-demand to trusted third parties and have a more relational partnership with other companies.

The current COVID-19 predicament gives us a unique chance to re-think and do things differently. CSPs are positioned at the center of this revolution by connecting our society; will they be able to adapt to future unprecedented challenges and situations quickly?

From a holistic perspective and with the support of the fantastic technologies mentioned in this article, this crisis is also an opportunity. We should seriously question ourselves. Every one of us should also ponder if we can formulate a fourth industrial revolution that shapes a better, fairer and more inclusive society that respects the most vulnerable sectors and takes into consideration that every action we take has an impact on other human beings.

"Act only according to that maxim by which you can at the same time will that it should become a universal law" – Immanuel Kant

– by Javier Ger, Telecom Argentina & Claudio Saes, Bell Labs Consulting

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