One hears much casual talk about permanent changes caused by Covid-19 lockdowns or work from home policies. Where it comes to use of communications capabilities, however, there is some evidence that the impact was quite transitory.
Data gathered by Ofcom shows that use of the internet climbed in February 2020, but by October 2020 was down to pre-pandemic levels. Most casual statements note the sudden surge in demand as the lockdowns began. Few seem to note that demand has returned to pre-pandemic patterns.
Some argue that mobility usage climbed during the pandemic. Ofcom data suggests quite the opposite. As you might expect, people confined largely to their homes spent less time connected to the mobile network.
People were not traveling outside their home areas so much. That is why roaming revenues dropped for virtually all mobile operators.
In other ways, mobile phone behavior was, in fact, not changed by the pandemic. Many casually make the argument that the pandemic “proves” the value of connectivity. It was important; it is important. But it might not be significantly more important, post-Covid.
Demand in urban office areas is likely to drop, as more people spend more time working from home, on a permanent basis. There will be some upgrading of connections in suburban or rural areas. But internet access was vital before the pandemic. It did not suddenly become more important because of the pandemic, though the places people used the internet did shift (from office to home; from school to home).
There was less use of mobile phones on the mobile network between March and October of 2020, as more people were confined largely to home, and used Wi-Fi connectivity.
Nor did calling behavior change. “Our crowdsourced data showed that 75 percent of panellists made a call in the first 11 weeks of the year, and 78 percent of panellists made or received a call,” Ofcom says. “There was no significant change in these proportions between pre- and post-lockdown.”
The impressionistic sense that “communications must be more important” is not necessarily borne out by the facts. It is similar to the anecdotal comments all of us have heard about “communications proving its value,” along with a belief that “communications firms must be making more money because of that.” In fact, most service providers saw revenue dip during the March to December 2020 period, for obvious reasons.
Economic activity was suppressed by government orders. And less economic activity, as in any recession, stifles communications revenues.
There are likely to be permanent changes because of the pandemic. But a dramatic and permanent leap in communications industry revenues or growth rates is unlikely.
In fact, there will be some downward pressure on demand, as urban office space begins to go unused. Fewer people working “downtown” means less bandwidth demand. Fewer people at work also means less demand for all surrounding merchants. Those merchants are also likely to require less bandwidth or connectivity demand.
Bandwidth demand overall will likely keep growing, at past rates. But the pressure is not all “up.” There will be some redistribution of “work” demand to residential areas. But the key driver of residential broadband demand is entertainment video, not use of work apps.
That will ripple through network planning assumptions, at the very least, even if revenue impact is relatively neutral. What seems to be developing is a rather temporary Covid impact on capacity demand and user behavior. In other words, Covid might, in the end, not have very much impact on connectivity revenue or demand.
Usage grows every year, irrespective of temporary events. More people watching more video streaming is going to affect usage more than did Covid.
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