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COVID-19 Impact in Telecommunication Industry

telecommunication industry covid-19

COVID-19 has had a huge impact on business since its outbreak. The situation isn’t different in the telecommunication industry.

So in this article, we explore the disruptions caused by the coronavirus and its effects on the market.

But also the trends and challenges facing the telecommunication industry in 2021.

Let’s begin.

Industry Opportunities

Unlike other sectors, COVID-19 has had a positive impact on the telecommunication industry in 2020 and 2021.

The biggest opportunity came about from the ongoing shift to remote work.

As more businesses move towards the New Normal and the remote workspace, they are driving the demand for networking infrastructure and connectivity.

Because of this, many players in telecom – from broadband providers to mobile and data center operators – have profited from the surge in traffic.

So the telecom market is performing better than other industries.

In fact, the industry is projected to grow by a steady 5.4% CAGR from 2021 to 2028, according to forecasts.

Several elements impact this growth:

#1 Rising Connectivity

telecommunication industry school coronavirus

According to the International Telecommunication Union (ITU), there were an estimated 4 billion Internet users at the start of 2020.

Of those users, 3 billion are located in developing countries. But that means that there are another 3 billion people around the world who remain disconnected.

As these people gain access to the internet, the impact of digitalization will only spur the growth of the telecom market in the future.

#2 Increasing Reliance on Technology

When the coronavirus pandemic first emerged in 2020, quarantines, social distancing, and national lockdowns meant people had to rely on technology to remain connected with one another.

This wasn’t reserved only for business, but people relied on the internet, voice, and video communication to remain connected in their personal lives, as well.

This means that the flow of traffic and data on the internet tripled overnight in 2020, and it’s unlikely that it will drop significantly in the coming years.

#3 Emerging New Technologies

Innovations like 5G network connectivity, the Internet of Things, and big data are all major telecommunication industry economic factors.

As these new technologies emerge, they will need a global optic change, a new network infrastructure, and ongoing telecom management to support them.

This is also where the communication sector’s biggest risk has appeared:

telecommunication industry coronavirus

Telecommunication Industry Challenges

Despite the tremendous market growth, telco disruption was a big deal in the wake of the COVID-19 pandemic.

The area of the industry that was hit the most by the virus was the optical communication assemblies.

Here, we’re talking about the network cabling suppliers that provide the necessary fiber optic cables and components for the development of high-capacity bandwidth infrastructures.

In fact, as a direct result of the pandemic, the global production of fiber optic cables dropped by 25% in 2020. Most notably in the Chinese province of Wuhan, where cable assembly and other operations take place.

At the same time investment in the area of telco network development has also dropped by -1.4% in 2020.

Because of that delayed delivery of network components, 5G and fiber optic network build had to be delayed until the end of the pandemic.

Likewise, telecommunication suppliers had to lower the quality of mobile and communication networks – including putting data caps and suspending users – to accommodate the growing traffic.

This has come at a bad time, as most companies have adopted the remote workplace model.

But at the same time, the remote workspace environment hurts telcos and customers alike.

Some telecommunications elements cannot work or suppliers can’t duplicate them easily which opens up network infrastructures to cyber attack and lowers their security.

So in 2021, the goal will be to overcome these challenges, and there are already new solutions on the horizon:

New Telecommunication Trends

telecommunication industry impact covid-19

The latest trends in the telecom sector cover all areas of the industry.

From workforce, through finance, to supply chains, here are the top emerging trends to look out for in 2021 and beyond:

Crisis response

For the time being, the telecommunication industry and IT services are cutting down on business development, especially when it comes to building new infrastructures.

This is helping companies take steps to provide continuous delivery of critical bandwidth speed, connectivity, and data flow.

Workforce

To overcome security threats in the remote workplace, telecom suppliers are investing more money into cybersecurity services.

This is helping them and their customers make the transition to the remote environment, without compromising the security of their technology.

Operations and Supply Chains

Because of their inability to expand their networks, telecom businesses are taking a step back to reassess their supply chains and operations.

This is helping them uncover wasteful processes and weak links that affect connectivity, including using data mining and analytics to identify customers that are most likely to be affected.

Finance

Despite the market growth projections, many are taking a closer look at their financial reports to cut costs and avoid additional debt loads.

This is helping them audit their spending and capital expenditure, which in turn allows them to remain solvent and develop new financial projections in line with the COVID crisis.

Brand Strategy

Lower bandwidth speeds and issues with data flow and connectivity have been a major telecom disruption to brand reputation.

To minimize any long-term impact, companies have reevaluated their cost structures and are investing more capital in their operational resilience, job security, and B2C relationships.

New Network Infrastructures

Despite manufacturing and supply chain delays, the telecommunications industry is still planning to move towards 5G connectivity and expand the global fiber optic cable network.

It is only a matter of time before the industry becomes stable enough to move forward with these plans.

The question isn’t if it will happen, but when, and businesses across the board have to be prepared for this change.

So…

Are you ready for these new trends in telecommunications?

If not, don’t worry. We can help you with that.

At Demakis Technologies, we provide network cabling services that help you develop tech stacks and infrastructure to support these latest trends.

Please CONTACT US to get in touch with one of our professionals who can explain everything and help you make that transition, step-by-step.

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