Perhaps the biggest story in telecom is the way global networks are handling an unexpected jump in usage caused by stay-at-home policies. Vodafone data traffic is up 50 percent in some markets. Telecom Italia fixed-line network data volume seems to be up more than 90 percent and mobile data has grown more than 30 percent since the country went into lockdown. BT says its U.K. daytime traffic has ballooned as much as 60 percent.
The sudden adoption of “stay at home” policies in many countries will provide a “stress test” for communications networks at the same time, revealing which networks are resilient, and which are less so. So far, there are few reports of problems, though perhaps it is inevitable that speculation about breaking the internet will prove irresistible storylines.
The real story is the absence of reports about actual service degradation. The enduring story, arfter the pandemic ends, is how brief the impact on the telecom business turns out to have had, and how consistent revenues will be, pre-pandemic and post-pandemic. To be sure, traffic up, virtually across the board, right now.
Verizon reported that between March 12 and March 19, 2020, total voice usage on Verizon networks was up 25 percent, with the primary driver being use of conference call services.
Cisco reports that traffic on the Webex backbone connecting China-based Webex users to their global workplaces has increased as much as 22 times since the Covid-19 outbreak began. During the same time period, Webex also saw four to five times as many users in Japan, South Korea and Singapore, with the average time spent on Webex video meetings doubling among users in those countries.
Mobile voice usage was up 10 percent, while call duration was up 15 percent. Presumably much of that is related to the use of conference calling services. Still, voice traffic requires so little bandwidth that none of that would affect user experience overall.
Virtual private network traffic was up 25 percent and web traffic was up 22 percent.
On March 19, OpenVault reported that data usage during business hours grew more than 41 percent. Average usage during the 9 am-to-5 pm daypart has risen to 6.3 GB, 41.4 percent higher than the January figure of 4.4 GB.
But the pandemic will end. Students will go back to school, employees will go back to work. Stores, offices, airports and factories will reopen.
It would be logical indeed to speculate on what lasting impact there might be for connectivity service providers. The answer, paradoxically, might be “not so much,” over the longer term. Economies will return to working from the office, the factory, the airport, the docks, the railroads, retail stores, hotels and movie theaters.
Yes, there will be some increasing remote work, perhaps changes in workplace densities and other social distancing policies that are relatively important for a few years. But connectivity spending is remarkably consistent, across consumer and business segments. A case in point is what will happen near term, in 2020, as a result of all the stay-at-home restrictions.
Worldwide IT spending is now expected to decline 2.7 percent in constant currency terms in 2020, IDC now predicts. Spending on communications services will be flat, which might be deemed a relative relief for connectivity service providers.
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