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Digital Platforms & Services

Digital Platforms & Services

New IDC Research Confirms Telecommunications Services Market Among the Most Resilient Sectors of the Global Economy in the COVID-19 Era

Via IDC

Sep 27, 2020

25 Sep 2020

New IDC Research Confirms Telecommunications Services Market Among the Most Resilient Sectors of the Global Economy in the COVID-19 Era

FRAMINGHAM, Mass., September 25, 2020 — Worldwide spending on telecommunication and pay TV services will reach $1.55 trillion in 2020, a decrease of 1.4% year over year, according to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker. IDC expects the market to start its recovery next year, but pre-crisis spending levels will not be reached before 2022.

In August, IDC completed a comprehensive analysis of the results reported by global telecom operators for the first half of 2020. The research confirmed our thesis that the telecommunications industry is one of the most resilient sectors of the global economy during the COVID-19 crisis. The operators' reports clearly showed that increased demand from the consumer segment during the lockdown, government measures aimed at protecting businesses and the general population from the economic impact of the pandemic, and the fact that telco services have been secured by longer-term contracts have helped the telcos avoid major losses in the first half of the year. Operators' predictions for the rest of this year, however, were generally more pessimistic as they anticipate a decline in revenues due to an economic downturn that would shut down businesses, raise unemployment, freeze tourist activities, and force people to cut spending on nonessential products and services. As a result, IDC has decreased its market forecast for 2020 by one half of a percentage point.

The negative trend is expected to impact all global regions, but not at the same magnitude. Revenue in the Americas, the largest regional market, is forecast to decline by 0.5% in 2020. Europe, the Middle East, and Africa (EMEA) and Asia/Pacific (including Japan and China) will drop somewhat more primarily because of the larger number of price-sensitive customers in the low-income countries of Africa and Asia. In the remainder of the five-year forecast, EMEA and Asia/Pacific are also expected to recover somewhat more slowly than the Americas because the customers in emerging markets are expected to remain cost-cautious for a longer time.

"In the first half of 2020, operators maintained solid resilience in large parts of their operations," said Kresimir Alic, research director with IDC's Worldwide Telecom munications team. "However, as countries around the world continue to struggle with new waves of COVID-19 and scientists are still quite far away from al solution to the problem, telecom operators are now focused on efficiency improvements to mitigate the expected negative impacts during the rest of the year. Together with additional cost savings, including lower capital expenditures following restrained investment policies, this can still be translated into operative EBITDA growth."

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