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Coronavirus to see telecommunications industry to drop by 3.4%

The effect of the coronavirus on the telecommunications industry has been laid bare by a new report.

According to Analysys Mason, revenues for telcos will fall by 3.4% in 2020, before returning to growth of 0.8% in 2021. This is an adjustment from the research firm’s previous estimation of 0.7% growth in 2020.

The report states that this ‘lost’ revenue will amount to more than US$40 billion in developed market.

Despite this 2020 dip, the report says that the telco sector will perform ahead of general GDP trends, accounting for 2.0% of the total, an increase from 1.9% in 2019.

The report continues that the pandemic’s impact on profitability will be able to be limited. It says that coronavirus will reinforce and accelerate existing downward trends rather than introducing new ones.

Stephen Sale, research director at Analysys Mason, said: “Consumer telecoms services, which account for the majority (68%) of telecoms revenue, tend to be relatively resilient during economic downturns, but large increases in unemployment, business closures and the overall decrease in economic activity will cause a sharp decline in business services revenue.”

Rupert Wood, another research director at the firm said: “Telecoms should stay healthier than almost any industry in this crisis, Telecoms should show some of the strongest post-crisis investment, in part because cash flow is more resilient in the telecoms sector than it is most others, and because some governments will emphasise 5G and fibre in stimulus packages.”