Impact of COVID-19 on the Indian telecom sector

Impact of COVID-19 on the Indian telecom sector

Telecom businesses are one of the top best-evaluated ventures in the market. With the developing time of digitalization, the industry has doubled its pace in the present pandemic crisis. This sector contributes to 6.5 percent of total GDP and has given employment to 4 million people in the year 2019-2020. Though there is a net fall in subscribers due to pandemic total subscriptions were 1.19 billion as of 30 September 2019. However, it should be noted that teledensity is 88.56 percent and FDI equity inflows are 8.13 percent.

Indian Telecommunication Industry before COVID-19:

Before the pandemic, media transmission businesses offered different types of assistance all over the world. The media communications industry has changed nearly everything, attributable to the reality of client needs and serious scenes moving in manners that a couple of businesses could have anticipated. Besides, before the flare-up, the Telco business was driving at its undeniable speed, and now also amid the pandemic, we have seen consumers getting attracted to data, more than 50% of the focus is shifted on data. The agenda of the telecom industry in India is concentrating on customer experience management.

Impact of COVID-19 on Indian Telecomm Industry:

As we are all aware the telecom industry is in service and handset business so we need to look at both perspective one by one:-

Services perspective:

Telecom is one of the most fundamental administrations and areas at the hour of the worldwide pandemic. It has been a key empowering influence in helping governments and organizations in timely communication, tracking, and helping actualize telecommute. With expanded flexibility of telecommuting as a feasible option for a few organizations, telecom organizations will have a rigging front end bundles, administration, and client procurement funnel to fulfill the need. This open door will make another arrangement of the working model, content utilization, and helped trade where telecom organizations can assume a vital job. Telco’s need to reinforce and turn out business progression plans and alternate courses of action towards isolating any of its significant call places, Network Operating Centres, and so forth including improving security conventions and VPN availability to encourage telecommuting.

Handset and OEM perspective:

The disrupted global supply chain is going to impact handset manufacturers and leading smartphone manufacturers are closing down their handset factories in various parts of the countries.

Financial Impacts:

As the world continues to cope with the effects of COVID-19, the Telecomm and tech sector has undoubtedly come to the forefront as the golden child of the Indian economy. While Telco has historically been less affected by recessions, some Telco’s may face issues with cash flow in the long term, similar to other industries. Investment in core data infrastructure and telecoms are increasingly attractive to investors and start-ups, they might be looking to a broader group of financial investors for next phase development. Many companies are looking at long term investments in their networks, and in some cases, pulling forward investment in 5G because of its increased reliability and speeds.

Opportunity:

The expanded broadband utilization at home has brought about pressure on the system and demand over above 10 percent. The telcos are likewise mentioning OTT platforms to ease network stress by decreasing video quality. Web broadband availability to confront tremendous pressure because of dependence on telecommuting. However, the telcos are bracing for a sharp drop in subscriber increments yet the interest for data transfer capacity is relied upon to go up from existing clients. Likewise, coordinated effort advances alongside telecom advances will have a chance to make new products and service offerings. An enormous center is the need of great importance for SMB and MSME customers who will investigate these choices to develop business. High Definition traffic which has been downgraded by Netflix/ Google and others will come back and consume capacity since connectivity becomes the lifeline of people. Work from home will continue to become ‘a new way of working’ thereafter. The government of India is taking informed action/ decisions and evaluating their decision based on Data analytics. AI will further play a greater role in inaccurate predictions.

Recommendations:

  • Relaxation of tax and compliances related norms similar to those relating to work from home can be initiated and submission of the annual report can be postponed amid crisis.
  • The Telecom sector can provide financial aid for companies to expand network rollouts.
  • Support for end customer can be increased by leveraging advanced technologies including IoT, OMNI channels and Artificial intelligence to gain a balance in the telecom sector
  • Telecom industries should develop infrastructure for comprehensive and robust cybersecurity and data storage capacities.

Future:

What is becoming more exciting, how we communicate and conduct business in the future will forever be transformed due to the crisis. Working from home will become more commonplace and communication platforms such as Zoom, Go-to-webinar or even Facebook watch will be used more frequently to replace face to face meetings. Telco networks will gain first-hand experience in dynamic network traffic management while businesses and their Telco partners will have a better understanding of the challenges of home working. Therefore, from a telecommunication perspective, this crisis has challenged the industry to invest in existing infrastructure and game-changing technology. Ultimately, telecom executives expressed confidence in their abilities to step up and meet the demand of a shut-in-India. Telcom and associated digital infrastructure is key to any nation’s progress. With 1.5 million kilometers of fiber laid and less than a fourth of the cell towers connected on fiber, there is a long way to go to ‘fiberize’ the backhaul infrastructure. Currently, most of the network connectivity in India is microwave-based, which accounts for about 75-80 percent of cell sites. For the network to be robust and available with low latency in the future, the need for 100 percent fiberisation has been felt the most at this critical stage.

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