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Coronavirus: the unexpected catalyst for digitisation

A data-based report about the implications of COVID-19 for the Telecommunications industry

PRELIMINARY REMARKS

Reply leverages Data and Analytics to gain insights into the development of the Coronavirus pandemic and how it impacts society, consumers and industries. Using the Quentin Search Data tool developed by TD Reply, which aggregates data from Google Trends and Google Ads, this report provides an Industry Impact Analysis on the Telecommunications sector.

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This report is in no way intended to distract from the fact that the outbreak of the novel Coronavirus is primarily a human tragedy affecting hundreds of thousands of people.

As the situation evolves rapidly, please note that this page reflects the data collected up until 28 April 2020.

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TELECOMS INDUSTRY BEFORE COVID-19

Even before the pandemic, Telecommunication companies (Telcos) were facing many challenges in terms of their business model. With technological innovation, new opportunities are on the horizon.

EFFORTS IN A SATURATED MARKET

By analysing the number of connection subscriptions, the market for Telecommunications in Europe seems saturated. Sales have stagnated, forcing providers to invest in new revenue streams (e.g. data monetisation) and innovative product bundling strategies (e.g. Media-Telco convergence, volume upselling).

LACK OF A CONSUMER-CENTRIC APPROACH

While other industries have setup consumer-first approaches, such as online retail and online services, for a long time, Telcos have failed to create trust in their brands. They suffer from the reproach of roaming charges, insufficient customer service and the overpromising of connection speeds.

EXPECTATIONS FOR THE FUTURE NETWORK

The network is at the core of Telcos’ value proposition. Connectivity and digital services are on the rise and new innovations based on AI and Blockchain are eagerly awaited. Transitioning to fibre and 5G will fuel this innovation path and bring along tremendous opportunities.

European Telecommunications Network Operators’ Association - Annual economic report 2017. McKinsey Quarterly. ETNO: Europe 2030 - A shared ambition for digital leadership.

SHORT-TERM IMPACT ANALYSIS

Telco shops have been forced to close, resulting in a decrease in offline sales.

However, Telecommunication providers have a great advantage because the majority of their revenue is generated by existing customers. Since the COVID-19 outbreak, consumer interest has been directed to stable internet access - more specifically, for broadband services, which has increased enormously in European countries.

In terms of the overall economic impact, the Telecoms sector has remained stable throughout the pandemic.

EU-5 CONSUMER INTEREST ON SELECTED INDUSTRIES

Data retrieved from Quentin, TD Reply’s Search Data tool, on consumer interest for the mentioned industries, across 5 EU markets (DE, ES, IT, FR and UK). CW13-16 2019 vs. CW13-16 2020.

TELCO BRANDS HAVE KEPT THEIR VISIBILITY

Due to the Coronavirus crisis, we have noticed a slight increase in consumer interest for Telecommunications between March and April 2020, when compared to the same period last year (CW13-16 2019 vs. CW13-16 2020).

EU-5 CONSUMER INTEREST FOR TELECOMMUNICATION BRANDS

Data retrieved from Quentin, TD Reply’s Search Data tool, across 5 EU markets (DE, ES, IT, FR and UK). Growth rate compares CW13-16 2019 vs. CW13-16 2020.

CHANGES IN CONSUMER INTEREST ACROSS COUNTRIES REGARDING TELCO BRANDS

+13%

+7%

+6%

±0%

-17%

Data retrieved from Quentin, TD Reply’s Search Data tool, across 5 EU markets (DE, ES, IT, FR and UK). Growth rate compares CW13-16 2019 vs. CW13-16 2020.

CONSUMERS ARE SEARCHING FOR A BETTER INTERNET CONNECTION AT HOME

WI-FI services, DSL and cable products have suddenly become much more important for consumers.

Consumer interest for wired broadband still varies according to each EU market, but on average there has been a significant increase:

Data retrieved from Quentin, TD Reply’s Search Data tool, across 5 EU markets (DE, ES, IT, FR and UK). Growth rate compares CW13-16 2019 vs. CW13-16 2020.

SOME NEED IT FOR WORK, SOME NEED IT FOR FUN

Telecommunications providers have been dealing with increased data traffic since the start of the global lockdowns. Many consumers have one demand in particular: to compensate the loss of outside leisure through online entertainment, including games and workouts.

Data retrieved from Quentin, TD Reply’s Search Data tool, across 5 EU markets (DE, ES, IT, FR and UK). Growth rate compares CW13-16 2019 vs. CW13-16 2020.

THE LASTING CONSEQUENCE: DIGITISATION ACCELERATES

The net is proving to be a critical infrastructure. Imagine this period of lockdown and social distancing without internet, without a collaborative network, without face-to-face remote communication. What would be left? Not much.

Take a look at some examples of activities that are already planning further digital expansion with direct impact on the world of Telecommunications.

SCHOOLS TO RECEIVE INVESTMENTS FOR DIGITISATION

  • € 85M will be invested by the Italian Government into distance learning *.
  • Over 80 state school teachers in the UK have created an online teaching platform: the Oak National Academy *.
  • € 500M shall be invested by the German Government to support digital learning and subsidise technical equipment for pupils in need *.

EMPLOYEES HOPE TO CONTINUE WORKING REMOTELY

  • 82% of office employees would like to continue working remotely at least 1 day-a-week after the crisis *.
  • 77% of them think productivity has not changed or has actually improved by working remotely *.
  • 55% are able to perform individual, focused work, better from home than at the office *.

COMPANIES TO INVEST IN INFRASTRUCTURE TO IMPROVE SALES

  • Worldwide search for “online shop” has increased by 77% since 14/03, suggesting that stationary retailers are eager to setup eComm capabilities in response to the crisis *.
  • Examples for the demand on infrastructure improvements are: VPN providers selling 4x the usual *; the global search for “Microsoft Teams” going up by 650% since 14/03 *.

Click on * to get to source.

INTERNET ACCESS AT THE TOP OF THE AGENDA

COVID-19 has pressured governments and organisations into discussing topics related to internet access and promptly deciding on mitigating measures.

The EU Commission wants to ensure all member states have 5G in place by 2020. In addition, the focus on e-health, digital education, e-government, data exchange and broadband is set to intensify.

The French Government has installed more connection antennas during the COVID-19 lockdown. This was to ensure a wider coverage of phone lines, Bluetooth, WI-FI and 3G/4G for everyone stuck at home.

The British Government has already reached an agreement with internet providers which foresees generous data packages and free calls to help people at risk during the lockdown.

TIM & Google Cloud are pushing cloud and edge computing across Italy. This is designed to help Italian companies implement 5G & AI technologies earlier and enable a faster recovery from COVID-19.

WITH GREAT POWER, COMES GREAT RESPONSIBILITY

If the internet and connectivity are a necessity for the world after COVID-19, Telecomm providers and governments have a shared responsibility to ensure that the most vulnerable people have the necessary tools in hand.

FREE BROADBAND TO SUPPORT EDUCATION

New Zealand’s largest Telco, Chorus, now provides 50,000 homes with free broadband to continue education at home during the COVID-19 lockdown. This initiative was supported by the Ministry of Education.

FREE HOTSPOTS & LATE FEES WAIVED

14.1% of US school children do not have enough access to the internet for online learning. AT&T, Verizon and CenturyLink have signed the “keep America connected” pledge, opening up free WI-FI hotspots and waiving late fees for customers.

LAPTOPS & TABLETS FOR VULNERABLE CHILDREN

SFA is one of the largest Telcos in France. Their foundation is driving donations of laptops and tablets to disadvantaged children in order to keep them connected to their online classes during and after COVID-19.

OTHER INDUSTRIES RELY ON TELCOMS’ EXPANSION

In the wake of the pandemic, industries have already experienced many changes: a growing need for remote monitoring, higher acceptance of intelligent payment solutions, the necessity of smart healthcare investments and a demand for Industry 4.0 solutions. It’s likely that these implications are here to stay, reasserting expectations for a wider, faster, more modern network.

IOT MARKET POTENTIAL

A NEW ERA OF SMART HEALTHCARE

COVID-19 is driving the development of wearables for health monitoring to facilitate the tracking of early symptoms among the population. These technologies should be further advanced with the introduction of 5G, leading to a new era for IOMT (Internet of Medical Things).

THE POTENTIAL OF INDUSTRY 4.0

Considering the interruption of global supply chains and production shutdowns due to social distancing, Industry 4.0 and robotic process automation could be a lucrative investment for companies - a way to avoid a production halt and allow remote monitoring.

The potential paths for countries and businesses to overcome the crisis are paved with technologies that depend on hyper fast broadband connections. Telcos’ growth and their cutting-edge infrastructure directly influence other industries and the implementation of new solutions, such as IoT, AI, Cloud, Surveillance, Immersive Experiences, Smart Spaces, Crowd Computing, among others.

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