Telecom services market may weather COVID-19 better than other ICT segments: Analyst

April 17, 2020
With nearly flat growth compared to a year ago, worldwide spending on telecommunications services is forecast to reach $1.6 billion in 2020, according to IDC.

In its latest market analysis, International Data Corporation (IDC) expects worldwide telecommunication services spending to reach $1.6 billion in 2020, with nearly flat growth compared to 2019.

Per a statement by the analyst: "The COVID-19 pandemic has impacted the market in several ways. On the positive side, IDC has observed increased use of telecom services due either to nationwide lockdown or work-from-home policies that many companies have implemented for their employees to follow. However, this doesn't directly translate into a surge in telecom spending due to many households having unlimited voice calls and unlimited Internet services."

IDC's statement further observes: "Commercially, the spend is inhibited due largely to the harsh economic impact that a number of industries are enduring. Businesses are either faced with temporary shutdowns or are closed altogether. The continued transition to IP and cloud services with lower ARPU as well as the reduction in GDP growth in the second half of 2020 are key factors that challenge the market. From a mobile perspective, there will be an additional negative impact including slower net adds, especially in the consumer segment, as retail outlets are closed during lockdowns making it difficult to activate net new devices and plans."

IDC will be releasing a comprehensive breakdown of the telecommunication services market next month in its newly launched product, the Worldwide Semiannual Telecom Services Tracker. The tracker will provide a comprehensive view of spending on different types of telecommunication services (in both fixed and mobile areas) as well as a detailed breakdown on connectivity installed base and traffic generated in a total of 75 geographies around the world.

Additionally, the tracker will rank the top operators by the different services markets across a total of 44 major countries globally; more than 550 operators are being covered in this tracker.

"COVID-19 is leading to a lot of uncertainty around the spending impact on various technology markets," comments Carrie MacGillivray, group vice president and general manager, Worldwide Telecom, Mobility, and IoT research at IDC. "We expect the telecom services market to weather the current conditions better than other elements of the ICT market."

Through its broad and in-depth coverage, IDC says its Worldwide Semiannual Telecom Services Tracker can be relied on by users to assess which sectors within the telecommunication services market are expected to grow in demand during these unusually challenging times.

"The COVID-19 pandemic is highlighting the importance of connectedness," concludes IDC's MacGillivray. "Telecom services are the common thread keeping us united as we weather this crisis."

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