The spread of COVID-19 will result into significant drop in revenue and Capex of mobile operators in 2020, according to the latest Analysys Mason report.
Telecoms operator revenue in developed markets is expected to fall by 3.4 percent in 2020, before returning to growth of 0.7 percent in 2021.
Operator Capex is likely to dip 3.7 percent in 2020 because of constraints in the ability to build networks and because of disruption to supply chains. Analysys Mason earlier forecasts that operator Capex will grow at 0.3 percent in 2020.
The latest IDC report said total ICT spending will decline 1.6 percent to just under $4.1 trillion in 2020. This compares to overall ICT growth of 3.5 percent last year, when IT spending increased by almost 5 percent.
Telecom spending will grow 0.5 percent in 2020 as the sector will be less impacted overall due to the demand for broadband remains extremely strong in some cases, higher as a result of increased working from home and isolation measures, IDC said.
Analysys Mason says that consumer services, which account for 68 percent of telecoms revenue, are 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.
Analysys Mason said telecom services revenue will grow 0.8 percent driven by demand in consumer broadband. Operators will be able to manage their costs by deferring some Capex, and scaling down Opex.
Consumer services, which account for 68 percent of telecoms revenue, will be more resilient than business telecoms services during economic downturns.
Business telecoms will be hit by the slowing economy. Large increases in unemployment, business closures and the overall decrease in economic activity will cause a sharp decline in business services revenue. Business mobile revenue will struggle in 2020.
Capex will rebound quickly, but 5G Capex recovery will be slower in Europe.
Broadband ASPU will be broadly flat. Operators will struggle to justify price rises during a recession. Many upgrading customers will experience delays for new fibre connections. Broadband revenue will decline by 0.4 percent in 2020 and increase by 2.1 percent in 2021.
Pay-TV and video services revenue will decline 4.7 percent overall in 2020, but will increase by 1.5 percent in 2021.
Fixed voice and broadband revenue will decline by 10 percent in 2020 but only by 1 percent in 2021.
Business mobile services revenue will decline by 12 percent in 2020 recovering slightly in 2021 with a 2 percent year-on-year increase.
IoT revenue will increase at 13 percent in 2020 (instead of 16 percent previously forecasted).
Fibre-to-the-premises (FTTP) Capex will fall in 2020 because lockdowns constrain network build. Supply-chain disruption will be a much smaller factor than work restrictions.
