Telecommunication industry boom during COVID-19
By Emmanuel Allottey
The telecommunications sector has seen a tremendous increase in demand for its services arising government-imposed restrictions to curb the spread of COVID-19 in society. The restrictions on movement have necessitated the requirement to spend more time at home and more usage of data for work and leisure, resulting in a significant impact on the telecommunication industry. The surge in traffic of data and voice have improved the financial performance of telecom players.
The International Telecommunication Union (ITU) estimates that there were over 4 billion internet users at the end of 2019, of which over 3 billion users are in developing countries. In Africa, only 294 million have internet access out of a population exceeding 1 billion, with many people and businesses disconnected. However, this is expected to change as technological advances in the coming decades, with progress in mobility, broadband, and internet services growing in capability and reach across the globe.
The telecommunication sector has emerged as critical in keeping economies moving under the lockdown in at least three different ways: Providing business critical connectivity and resiliency; Facilitating work-from-home arrangements; Keeping individuals and societies connected and informed, with access to medical, financial, commercial, and other essential services during mandated social isolation.
Excessive demand on mobile and communications networks can have an adverse effect on service quality creating a ripple effect as companies across various sectors implement remote-work plans. The COVID-19 outbreak has exposed that many telecommunication providers are utterly unprepared for increased demand in the broadband traffic. Telecommunication players are faced with upgrading their infrastructure by buying new systems and investing in new hardware to be able to support sudden usage spikes effectively.
Auxiliary services provided by telecommunication players and partners such as mobile money transactions and other digital transactions have been negatively impacted by government directives ranging from the waiver of fees to mandating discount on charges as part of measures to ease the financial burden on customers in the wake of the Covid-19 pandemic. In Kenya, the Central Bank of Kenya (CBK) mandated the removal of the charges on mobile money transactions up to a certain limit to facilitate increased use of mobile money transactions instead of cash, with the immediate objective is to reduce the risk of transmission of COVID-19 by handling banknotes.
As the global economy continues to reel from the impact of the novel coronavirus communications providers at the centre of contingency plans are booming.