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Over the past few weeks, major operator groups across the world released their much-anticipated Q2 results, exposing the true impact of COVID-19 on their performance. The results have shown resilience among operators with low-single-digit declines in service revenue for most. Although this brings some temporary relief and discredits doomsday scenarios, the industry needs to adapt quickly to the changes the crisis brought and prepare for a potential repeat.

Operator revenue performance in relation to COVID-19 varied widely between markets. In Africa, operators such as MTN and Vodacom benefited from a steep increase in mobile data usage and mobile financial services as people sent money to family members and friends in need. Operators in Latin America (e.g., Telefónica) and Russia (e.g., Veon) suffered from deep currency devaluation and massive economic slowdown. Meanwhile in China, Europe, and North America, operators with fixed broadband operations benefited from increased adoption of 1Gbps broadband, nearly offsetting the drop in mobile revenue (e.g., AT&T, China Mobile, Vodafone). Fixed fared better than mobile as customers considered home broadband connectivity essential during lockdown.

A striking common theme among operator groups is confidence in the strategy and long-term goals that were set before the COVID-19 outbreak. Digital transformation, 5G, AI, and IoT still all remain relevant but executing those plans will change fundamentally. All operators must undergo an in-depth internal review of their strategy and how they currently operate, considering new customer priorities and new business practices. However, it is very difficult to get an accurate picture of what the post COVID-19 world will be like. The permanent effects of the outbreak on people’s behavior have yet to be determined and understood, and will vary enormously between individuals, businesses, and countries. In the meantime, a re-examination of capex and technologies to increase network quality in homes outside of city centers, revisiting the customer experience on digital channels, and re-assessing partnerships for cloud-based services and network architecture are worth exploring.

Looking at the next six months, COVID-19 is starting to re-emerge with temporary localized lockdown and travel restrictions. Those waves in infection rates will bring some sort of COVID-19 seasonality to revenue performance, network traffic, and churn. For example, we anticipate broadband churn to rise when lockdown restrictions are lifted, and it is safe to have engineers into houses. Operators should set up an emergency COVID-19 mode of operation that can be switched on when government restrictions return; for example, operators can look to reactivate special COVID-19 tariffs in affected areas.

Change is not easy, but operators have already shown a remarkable capacity for innovation and agility in handling things so far, which will need to be maintained, and even accelerated, as the full economic impact becomes clear in 2021.

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