Sunday, April 12, 2020

Will Business Customer Revenues Drop, Because of Pandemic, Longer Term?

It would not be unexpected to see a near-term dip in business customer revenues as a result of the Covid-19 pandemic, caused, if nothing else, by a huge number of small business bankruptcies, which removes that demand from the system. Also, since economic contraction depresses demand and therefore revenues, a post-Covid recession also will work to inhibit demand, and therefore revenues. 


That was what happened in the wake of the 2008 recession, for example. 

source: Analysys Mason


Some expect a slight dip in revenue or slow growth in the wake of the pandemic. Some services will slow more than others, but often as an acceleration of already-existing trends. Generally speaking, what was growing before the pandemic will keep growing; what was declining might shrink faster. 


Consumer spending might prove more resilient, as people tend to spend about the same amount of money, year in, year out, on connectivity services. Telecom service provider revenues did not change much in the wake of the Great Recession of 2008. In fact, according to some studies, U.S. consumer spending on communications actually grew, overall, in the wake of the Great Recession, for example. 


Whatever the immediate, short-term impact, it would be reasonable to expect the underlying prior trends to reassert themselves within a couple of years--possibly sooner--where it comes to connectivity services.


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