Covid-19 Has Not Been Good for Communications Service Providers, Despite Conventional Wisdom

There is an unfounded belief that widespread lockdowns and stay-at-home orders in many countries “must be good” for communications service providers. 

That is not the case. In some cases service providers have experienced subscriber losses. A revenue contraction has widely been expected, is expected and earnings reports are starting to show that has happened. 

source: Analysys Mason

Recent times of economic contraction or business failure (2008 Great Recession the former case; Dot-com bubble burst the latter case) have lead to contractions in spending on communications services, if brief (rebound in one to three years). 

Consumer spending arguably changes less than business spending in times of stress, in part because consumer and small business spending is more often based on “what we must have” than “what we’d like to have.”

So consumers operate closer to minimum viable spending (need to have), where enterprises tend to operate with more spending headroom (nice to have).