4 Ways Telco Companies are Navigating COVID-19

Smart city and Wireless communication network.

Image souce: Adobe Stock / yingyaipumi.

by Daniel Britcher

posted on 04-06-2020

With the number of people currently working from home, accessing educational resources for homeschooling, and streaming video entertainment on the rise, the telco industry most definitely is seeing spikes in voice, data, and broadband services.

Indeed, telecommunication operators have been busy paying close attention to the traffic coming in over its networks and adding capacity daily to ensure that customers can stay connected during these challenging times. This crisis has certainly proved just how crucial telecommunication providers are to the functioning of everyday life, and, even amidst this major disruption, there is now a real opportunity for operators to gain service and reputational ground with customers.

On the business side, telcos are also focusing on providing their enterprise customers with business continuity solutions. Networks have become a critical part of national and global infrastructure, such as the provisioning of remote working and collaboration solutions for small and medium enterprises. In many cases, telcos are ensuring that vital services such as healthcare, government, and supply chains continue to function.

Below we dive into some of the ways that telco companies are navigating this disruption, as the industry collaborates at an unprecedented level. At Adobe, we firmly believe that operators who are focusing on how to best serve their customers and employees will be the most successful when these challenging times pass. It will strengthen their position with consumers, regulators, and wider society.

Communicating with customers

According to Comscore’s Total Home Panel data, average in-home data usage is up 18% so far in March 2020 versus the same amount of time in March 2019 (March 1-17, 2019 versus March 1-17, 2020). The most notable device-level data usage increases seen thus far are for mobile phones, smart speakers, connected TVs, and streaming boxes/sticks. In the US, AT&T reported that its voice calling traffic was up 44%, Wi-Fi calling was up 88% and landline home phone calls were up 74%. In EMEA, Vodafone’s internet usage has surged by up to 50% in some European countries as consumers shift to working at home.

With the surge in internet and mobile phone usage and congestion on networks as millions of us are confined to our homes, the industry has come together to create an awareness campaign for consumers about how to reduce capacity and manage connectivity. In the UK, the telecom companies BT, Sky, O2, Vodafone, and Virgin Media have put competition aside to work with the regulator Ofcom to launch a national campaign across digital, social media, and direct communications to the tens of millions of customers signed up for broadband, mobile, and TV deals.

Social responsibility

As a part of critical infrastructure, Telco operators — including AT&T, T-Mobile, Sprint, and Verizon — are contributing to communities on a global level by working to suspend or even eliminate data caps, waive late payment fees, and temporarily halt the termination of service for customers unable to pay bills.

At the same time, operators in the U.S. are offering free access to broadband and Wi-Fi for college student households for the next 60 days. Many are partnering with school districts to make sure local communities are aware of tools to help students learn remotely and opening WiFi hotspots for the public to use.

In the UK, Virgin Media has given almost 3 million of its mobile customers 10GB of free data as a gesture acknowledging they will be using their phones more as the country goes into lockdown. The company, which has more than 5 million broadband customers, has also moved to scrap the 20Mbps usage cap that many broadband customers, mostly older customers on historic contracts, are still on to allow them to use the internet freely.

Some telcos are also involved in social responsibility initiatives. For example, Vodafone has announced a five-point planto maintain network service and assist governments across Europe to tackle the coronavirus outbreak. Vodafone is also pushing out public health alerts to its 1.3 million users in the Czech Republic through its emergency app Zachranka.

New ways of working

As small- and medium-size enterprises pivot to remote work and digital collaboration tools to remain connected to their teams and clients, they are putting significant strain on network capacity. Still, operators are leveraging their current infrastructure to support this shift for businesses and additional usage.

The rise of working from home is leading to massive growth for firms operating virtual private networks (VPN), with the UK experiencing a 48.1% growth in the use of business VPNs over 12 days. According to global figures released by NordVPN, business VPN usage in the Netherlands (+240.49%), Canada (+206.29%), and Austria (+207.86%) have seen the biggest growth, while Italy has had the most modest growth at just 10.57%.

According to Oliver Wyaman research, most telco companies report having benefitted from having good business continuity management in place (including with third-party suppliers), and as such, are well equipped to support their enterprise customers by increasing backbone capacity to deal with extra traffic. The current crisis presents an opportunity to increase telco relevance for society and enterprises by providing business resilience solutions in communication for health centers and remote patient diagnostics as well as supporting e-learning tools for educational centers to keep contact with students.

Investment in infrastructure — 5G

There is already speculation about how the current crisis might affect the broader future of the telecom industry. Many believe that these upheavals could expedite society’s move toward a more digitalized existence. According to analysts, this might drive more significant investments into telecom networks, including both wired and 5G.

“Once this crisis passes we believe the heavy demand on wireless and wired networks will shine the light on the need for additional spectrum allocation and continued programs to support pushout of broadband into rural areas to lessen the digital divide,” wrote the analysts at Wall Street research firm Wells Fargo, noting the FCC’s planned $20.4 billion Rural Digital Opportunity Fund program that is scheduled to start in October.

Verizon and Vodafone — two of the world’s largest operators — have already committed to increasing their spending on their networks this year in response to customers’ rising data demand. Additionally, the merger of T-Mobile and Sprint may be a catalyst for up to $40 billion in spending over three years as the combined company merges and upgrades its network.

At the same time, there is a move to designate the telecom networks as “critical infrastructure,” at the same level as other services such as water, gas, and electricity. There is hope from the industry that through collaboration with governments, financial institutions, and regulatory bodies there will be consensus on investment and support from a taxation perspective in developing 5G capability.

Topics: News, COVID-19

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