Summary Bullets:
• GlobalData has established daily monitoring to assess the possible impact on our core telecoms and pay TV forecasts from COVID-19. As and when required, we will adjust our projections.
• Our measured, evidence-based approach to reviewing and adjusting our forecasts is supported by recent telco executive statements on COVID-19, which point to it being too early to tell what the specific impact of COVID-19 will be on their businesses.
We are actively monitoring our telecoms and pay-TV forecast portfolio countries for possible impact from COVID-19, and are ready to revise our projections as and when required. GlobalData’s forecast coverage encompasses mobile (108 countries), fixed (98 countries), multiplay (22 countries), and pay-TV (57 countries; click here for more.
Our daily monitoring covers a large variety of dimensions related to COVID-19, including:
• The potential impact on GDP and employment.
• The impact on telcos’ 5G rollout projects – a slowdown in rollout could result from travel restrictions on staff responsible for network deployment as well as disruption to equipment shipments and manufacturing.
• The impact on telco retail operations – e.g., a shortage of staff in shops or shops closing down may have a negative impact on subscriber acquisition.
• The impact on telco call center operations (on-shore and off-shore) – a shortage of staff in call centers or temporary call center closures could have a negative impact on customer retention activities, renewals and customer support.
• The impact on telecoms revenue – for example, a telecoms ARPU uplift could potentially occur due to an increase in service usage resulting from reduced physical mobility (e.g., a rise in mobile/fixed data usage, mobile calls, video usage, and virtual meetings/conference calling).
• The impact on handset sales, driven by potential disruption in handset manufacturing supply chains.
Our evidence-based approach to reviewing and revising our forecasts is supported by recent statements from several telcos. Collectively, these statements highlight that it is currently too early to accurately assess the impact COVID-19 will have on telecoms markets.
On March 11, 2020, for example, Telecom Italia’s CEO, Luigi Gubitosi, made comments to the effect that it was at this stage difficult to determine the impact the epidemic would have on the company, but highlighted possible risk related to damage to the economy. In the U.S., AT&T Senior Executive Vice President and CFO John Stephens stated on March 10, 2020 that the company had not seen “a significant impact in its supply chain at this point.” Verizon has said it is yet to experience any material impact from the epidemic, mentioning that its supply of devices and network equipment have not, as yet, been affected, but acknowledging that both could be affected in the future. Deutsche Telekom’s CEO Timotheus Höttges made similar comments in February.
Furthermore, analysis of several previous epidemics shows that telecoms markets have proven broadly resilient to disruption caused by virus outbreaks. These cases support our view of taking a measured, evidence-based approach to revising our forecasts. We are fully aware, though, that the magnitude of the COVID-19 pandemic is unprecedented in recent times and, as such, the relevance of these cases could be limited. Continue reading “COVID-19: GlobalData Sees No Need for Forecast Changes Yet”
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