Post-Pandemic Service Provider Growth Rates Might Vary

Nobody yet can predict how consumer behavior could change after the end of the Covid pandemic. If past behavior in the aftermath of major global recessions applies, connectivity providers will see revenue impact based on underlying growth trends in each market.

Developing markets might make a relatively-swift rebound after a modest dip, might see flat revenue or possibly even grow, but only at a slower rate. Service providers in developed markets arguably face more risk, in some regions. 

“From 2007 to 2009, many European operators’ average revenue per user dipped by more than 15 percent, and churn rates rose by the same amount for operators in both North America and Europe,” say consultants at McKinsey. 

Revenue and profits in North America are stronger, so there might be relatively slight impact. 

source: McKinsey

The Organization for Economic Cooperation and Development countries, on the other hand, saw only a one-year flattening of growth in the wake of the internet bubble in 2001, but saw sustained, multi-year drops in revenue after the great recession of 2008, likely for reasons not related directly to the economy. 

source: OECD

But some data suggests global revenue after 2008 was buoyed by growth in developing markets, even if some developed markets did not recover as quickly. - 

source: IDATE

Smartphone sales are likely to suffer in the near term, however.

It could hardly be otherwise when major parts of the economy are simply shut down, supply chains have been disrupted and on top of that we must work through an unprecedented planned effort by governments to throw economies into recession.

Smartphone sales globally dropped 40 percent in February 2020, for example. CCS Insight now predicts that phone sales worldwide will drop to a ten-year low in 2020 overall. 

Sales of 1.26 billion smartphones sold globally in 2020 would represent the lowest sales in a decade. The global mobile phone market is expected to slow by 13 percent in 2020, with shipments in the second quarter of the year predicted to fall by 29 percent, CCS Insights predicts. 

source: CCS Insight