In April 2020, early in the Covid-19 pandemic, Analysys Mason forecast telecom revenue in developed markets would fall by about 3.4 percent in 2020, with less than one percent growth in 2021.
Global revenue might not reach 2019 levels until 2023, Analysys said in December 2020.
International Data Corp., on the other hand, predicted that global telecommunications and subscription TV services revenue would dip less than one percent in 2020.
Note that these forecasts were made in May 2020, and might well change. Here is Analysys Mason’s May 2020 forecast, with a range of cases from mild to severe impact. Also note that the "moderate" scenario tracks the "mild" scenario closely. Some might argue that means the "moderate" recovery case is almost the same as the "best case" forecast.
In the moderate case, we return to 2019 revenue levels by perhaps 2023. The "worst case" is almost impossible to anticipate, in terms of time of recovery.
In the first quarter of 2020, revenue declined about 2.2 percent globally, according to ResearchandMarkets. Some service providers saw revenue “growth rate” declines as high as 12 percent in the first quarter alone, including telcos in the U.S. market.
Even if it seems too optimistic, the IDC prediction is well within historical expectations. The Great Recession of 2008 caused a momentary flattening of revenue growth, with the prior pattern asserting itself quickly afterwards. A modest dip would not be without precedent, even if we fear greater damage.
And though it is reasonable to expect a dip in business customer spending (with economies shut down and significant bankruptcies expected), consumer spending on telecom services might well increase, as it did in the United States in the aftermath of the 2008 Great Recession.
IDC estimated global service provider revenue at nearly $1.6 trillion in 2020, a decrease of 0.8 percent compared to 2019. IDC expects the decline to continue in 2021, but at a somewhat lower degree.
The mobile segment, the largest segment of the market, will post a slight decline in 2020 due to lower revenues from roaming charges, less mobile data overages due to the stay-at-home situation, and slower net additions, especially in the consumer segment, IDC argues.
Fixed data services spending was forecast to increase by 2.9 percent in 2020, however. In the U.S. market, that appeared to have happened. In the United States, in the third quarter of 2020, for example, net broadband additions in the first quarter were the highest since 2015, while in the second quarter, net additions were about triple the rate for the same quarter of 2019, according to Leichtman Research Group figures.
Subscription video services were expected by IDC to be boosted by the lockdown, but also affected by the economic downturn, so the spending in this category is expected to decline slightly in 2020, IDC said.
The Americas market was forecast to see a tiny decline of 0.04 percent. Europe, the Middle East, and Africa (EMEA) and Asia/Pacific (including Japan) will dip more. Growth is not expected in EMEA or Asia/Pacific before 2022 as the users in emerging markets are expected to remain cautious about spending for some time, IDC estimates.
It remains to be seen who is correct about the extent of the revenue dip in 2020. It also remains to be seen whether a historically-seen pattern of relatively-swift rebound happens once the pandemic is over.
No comments:
Post a Comment