Operator Business Outlook: The New Future

Huawei attempts to summarize a recent analyst presentation by Omdia's Ronan de Renesse on the business realities for network operators during a pandemic.

September 10, 2020

4 Min Read
Operator Business Outlook: The New Future

The number of daily Covid-19 cases has been stabilizing at a global level. However, some countries are experiencing a second wave of cases or a resurgence of the virus leading to the reintroduction of lockdown and restrictions in some local areas and international travel quarantines. In this situation, what's the impact on operator revenues and services for mobile and broadband?

For mobile, Covid-19 affected the number of sales of handsets and new contracts due to the closure operators' stores. Restriction of international travel heavily impacted international roaming revenues. The deployment of 5G was delayed due the postponement of 5G auctions and access restrictions to network sites such as base stations. As a consequence of COVID-19, Mobile services revenues are expected to decline by 4% to 5% across key markets in 2020 but are set to recover by 2022 or 2023.

Figure 1:

The perspective for fixed broadband, on the other hand, is rather positive. There is increased use of home broadband services as people stay at home and accelerating adoption of digital services and remote services delivered from broadband. This led to a solid focus on the quality of service and experience associated with these services in the home. COVID-19 will slow-down revenue growth for fixed broadband in 2020, which is expected to reaccelerate from 2021 onwards. The transition to fiber, driven by the demand for a better quality of experience on home networks, will be an essential part of revenue growth.

COVID-19 drove operators to accelerate digital transformation to address the new demand from consumers. Internally, operators need to invest in digital channels, self-care applications, remote/virtual installation, network management automation and cybersecurity to counteract for cyber threats. Operators' can also help business customers with their own digital transformation projects by sharing their experience and providing some new tools. That can be achieved through some hyper-scale partnerships with some of the big tech giants. Omdia Senior Research Director Ronan de Renesse recently shared some statistics from a survey conducted in June that looked at how Covid-19 really impacted the use of digital services.

What is the new future for operators in the post-COVID-19? Ronan de Renesse has five key recommendations.

Firstly, plan well for the next phases of the crisis, focusing on the immediate short and medium term.

Second, operators need to continue to be good corporate citizens by providing innovative tariff such as free access to essential digital services like e-learning, and also helping governments to fight against the virus. This really improves the image that citizens will have of operators which has been tarnished in the past.

Third, keep the 5G momentum going. Don't scale down 5G deployment and CAPEX investments in 5G because 5G is ultimately what is going to drive growth in the future for mobile services. It will help operators recover quicker from Covid-19.

Fourth, maintain and grow network capacity where necessary. Maybe reallocate some capacity in the network to target local lockdowns if possible. Be adaptable and dynamic in terms of managing the capacity on the network. Also, anticipate longer-term trends in terms of people going back to work in the future of urban centers and big city centers.

Finally, invest in digital customer experience. We've seen a steep rise in digital services usage and digital channels, becoming primary sales channels. That's not going to stop at the end of Covid-19, and people will continue using those more and more. Make sure that you make the right investments, and you strike the right partnerships to fuel digital transformation acceleration.

In summary, Covid-19 is not over. Operators have been resilient so far, but some changes will be necessary, especially with regards to digital transformation, to maintain performance in Q4 as the downward economic pressure will reach its peak. Mobile services are going to recover within two years for most big markets except in Europe. 5G is not going to be affected in the long term. On the contrary, we expect that it's going to grow faster in a shorter amount of time. Fixed broadband technology is becoming essential. The quality of the experience in the home is going to be very important and a key differentiator for new broadband signups. Digital transformation acceleration is a challenge but also can create some opportunities for operators.

This content is sponsored by Huawei.

Huawei Technologies Co. Ltd

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