Most observers would agree that long-standing consumer habits—more money spent on services, greater digital adoption, and more time and money spent out of the home—have been interrupted, accelerated, or reversed during the Covid-19 pandemic.
There likely is less agreement on the permanency of those changes. The question for connectivity providers is whether there are direct implications for revenue streams, if any. One might argue that the simple fact that data consumption grows 40 percent each year drives revenue upside. It does not.
Higher consumer data usage tends to drive capital expenditure, as networks must continually be upgraded, but consumer spending is quite resistant to upside changes. In the mobile or fixed business, average revenue per user grows over time only as users buy more-expensive usage plans. And such changes are relatively slow-moving and slight in magnitude.
In fact, the real cost of broadband and communications has--in many cases--dropped over the past two decades. Upside arguably exists for owners of content streaming services and possibly some connectivity providers who also are partners in healthcare delivery services using connected consumer devices, especially when using new dedicated access accounts (internet of things access, for example).
McKinsey consultants have argued, for example, that e-grocery shopping, virtual healthcare visits, and home nesting were likely to stick while remote learning, declining leisure air travel, and decreasing live entertainment would likely revert closer to pre-pandemic patterns.”
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