Impact of COVID 19 Pandemic on Telecom Network Usage
By : Rajkumar Solanki and Varun Talati
The outbreak of COVID 19 and the subsequent lockdown across the globe has forced millions of people confined to their houses. Consumers and firms are depending on the network provided by CSPs more than ever for social connectivity and business continuity. This is quite visible from trends like unprecedented rise in eCommerce activities for medicines and other essentials or increased sign up for entertainment and gaming apps or higher usage of apps for voice calls and video calls to distant countries.
Let us find out in detail, what are the patterns observed across the globe in terms of telecom services usage. Be it basic telecommunication or high-end collaborative platforms, or entertainment platforms – telecom operators across the globe have enabled mankind to manage this unprecedented citation to a great extent.
COVID 19 impact on key KPIs across selected CSPs
In general, almost all the CSPs across the globe have seen high usage for the data services, thanks to the OTT platforms. Voice usage also has increased for some of the CSPs. But our analysis proves that the surge in data usage hasn’t directly translated to higher revenue. While CSPs with a higher increase in voice services have secured a decent increase in their revenue.
Region-wise network usage trends
The impact of Covid 19 on network usage in different regions are summarized below:
Telcos across Africa have seen data usage surge by 20-40% with partial or complete lockdowns coming into effect. While voice usage has seen a marginal decline, ranging from 1-8%, the increase in data usage has not brought about a proportionate increase in revenues due to
- Lower contribution of data revenue
- Increased discounting announced by telcos as a relief measure to consumers
The few telcos who took proactive measures before the lockdown implementation have been able to hold; and even increase revenues, at least for the first 1-2 weeks. Multiplay telcos were the only ones to see a double-digit revenue drop, due to the waiving of mobile money transaction fees on lower-value transactions.
Overall, the impact of lockdown in the African region seems muted, especially if seen in comparison to some countries in the APAC region. The primary reason for this being the widespread penetration of mobile money in the African markets, which reduces consumers’ dependency on brick and mortar retail drastically.
In South-East Asia, the pandemic has so far impacted operators with a decrease in data usage and voice usage resulted in revenue loss by 24% to 32%. SE Asia regions were one of the first to experience the pandemic impact; governments have responded with nation-wide lockdown and have insisted work from home for both private firms and government institutions. This has created a shift in data and voice usage, subscriber mobile network usage has shifted to wifi, even the voice calls have shifted to OTT platforms. This shift is reflected in about 50% drop in data usage and 30% drop in voice usage in some of the markets in this region.
Governments across the region have encouraged citizens to adopt digital mediums for daily transactions. This has resulted in increased data usage by 18% to 32% across countries. For some operators, the majority of the data consumption was due to content OTT platforms. Although revenue has dropped by 15% to 28% due to the increasing rate of pack utilization, which has reduced revenue per MB and a steep decline in voice usage by 10%.
CSPs in the region are heavily dependent on retailer networks for most of their monthly top-ups. To offer flexibility to customers, many CSPs have seeded data benefits, voice benefits & extra validity to avoid forced churn.
Comparing revenue impact & approach for CSPs in the region is the providers who have not seeded the voice have experienced a steep decline in revenue by than the operators who did.
Like other regions, the lockdown has impacted CSPs across the Latin American region, where data usage has increased by 7% and revenue has declined by 14% for the region. In the region, increasing demand for data services has challenged many operators to maintain the digital experience and connectivity speed.
What lies ahead
This is time for CSPs to engage with their customers through digital channels proactively and offer the services that meet their immediate and future requirements. In order to reduce revenue vulnerability, and ensure continued customer engagement and loyalty, CSPs must start focussing on;
- Customer engagement over multiple channels: Engaging with customers through multiple touch-points, both digital (mobile apps, web, social media, chatbots, and interactive speakers) and non-digital (Interactive SMS, USSD and IVR)
- Increase wallet share: CSPs operating with multi-play services or having partnerships in other lines of business should utilize the power of analytics to identify potential customers for other adjective services such as highspeed connectivity, mobile money, or video streaming platforms.
- AI-powered engagement: If not late, this may be the right time to use AI-driven analytics to engage with the customers. Instead of bombarding the customers with irrelevant and broad product offerings, AI-driven analytics can help to recommend the next best offers to the customers based on their past and immediate preferences and actions.
As humankind is fighting a pandemic that has made physical distancing mandatory, CSPs have helped to keep us together atleast digitally. But as the demand for data connectivity increases across the subscriber base, CSPs are also in need of high investment in terms of infrastructure. However the shift in consumer’s preference to avail commercial, educational and entertainment services via digital channels is expected to benefit CSPs in the medium to long run.