UncategorizedTelecommunication Sector in wake of Covid – 19 Pandemic

BACKGROUND 

The current pandemic has painted an entire new image of growth for certain sectors, especially telecommunication sector, which has played a role of life saver for the companies and individuals during quarantine and lockdown. The lockdown and social distancing measures have led to higher dependence on digital tools, which in turn has increased the demand for telecom services.  For the continuity of the business during current pandemic, companies are solely relying on video conferencing and webinars which has triggered the demand of technology and telecommunication sector.

Ministry of Home Affairs (MHA) vide order no 40-3/2020-D dated 24.03.2020 had issued certain guidelines wherein clause 4(d) has categorically mention telecommunication services as an essential services, it states that

“Telecommunications, internet services, broadcasting and cable services, IT and IT-enabled services (ITeS) only (for essential services)” are the essential services and are exempt from the lockdown.

Continuous use of internet and digital tool have invited for various opportunities along with the problems and difficulties for telecommunication sector.

NETWORK TRAFFIC & CONNECTIVITY

Sources states that overall traffic on telecom sector has been observed as 10 per cent surge, which gradually have increased to 20% due to the excess use of internet and digital tools due to work from home policies amid lockdown. 

Another aspect which needs to be focused is connectivity issues and call drops.  It’s very natural that usage of network and internet due to lockdown would be considerable then normality. The telecommunication companies (Telcos) have come forward with the appropriate measures to resolve the issues regarding the connectivity like setting up of Network Operating Centres (NOCs), and virtual war rooms for easy coordination with their team members who are required to maintain their NOCs to resolve the network and connectivity glitches.

PARADIGM SHIFT IN CONSUMER PREFERENCE 

A major shift in consumer behavior is underway in the wake of the COVID-19 and lockdown measures that are aimed at control the spread of COVID-19 pandemic. Higher dependency by the companies and individuals on digital tools such as videoconferencing, webinars, conference calls, etc., are thereby driving up demand for telecom services, which itself is a break of day of complete new era. The demand for text messages may show a huge decline in view of video calls and voice calls. The schools and educational institutes globally may demand for the contingency plans that encourage distance learning.

Telcos are initiating variety of measures to improve the customer experiences by offering them cost effective tools to attract the customers who are working from home.  Several IT companies in India are anticipating to have the work from home policy for their employees even post lockdown, which will change the entire perspective of companies and their preferences from telecom sector.

SUBSCRIBERS & TARIFF RATES

Subscribers

Cellular Operators Association of India (COAI) has indicated that on monthly basis regularly the average net addition of subscribers are 3 million, which have witness a huge fall in the month of March, 2020 because of COVID-19 impact, it may come down to below 1 million.

Telcos are expanding their 4G network and also trying to approach the customers to shift from 2G phones to smartphones, which demands new SIM cards. However the execution of this plans might face hurdle due to travel restrictions and lockdown. 

Tariff Rates 

Telcos are brainstorming in respect of the tariff rates which may increase in second half of year 2020, which will have direct impact on consumer spending power.

Telecom Regulatory of India (TRAI) vide Press Release no 23/2020 has issued Telecommunication Interconnection Usage Charges (Sixteen Amendment) Regulations, 2020 which has revised the present regime of fixed international termination charges (ITC) from @ Rs. 0.30 per minute to Rs.0.30 – 0.65 per minute.

Sources states that Telco’s are trying to provide various offers including lessen in tariff rates to retain the subscribers and consumers amid lockdown like prepaid validity of their low-income subscribers has been extended till April 17 and further to May 3 on subsequent announcement of lockdown extension. Some telcos have credited additional talk time to such users whereas some has provided the minutes of free talk time and text messages to all its users.

CONCLUSION 

The current pandemic situation may result into key revolution into telecom sector.  As COVID-19 continues its rampage, certain relaxations and relief measures, may certainly act has an aid to telecom sector.

Guidelines issues by Reserve Bank of India (RBI) has issued relaxations on repayment of loans by allowing banks to provide the moratorium of 3 months on payment of all instalments in respect of term loans which will help the telecom companies which according to the sources normally owes the debts of 1.5 to 2 lakhs to Indian Banks.

Increasing period of lockdown will seek a flexible and resilient telecommunication facilities to satisfy the increasing needs of companies and individual due to work from home policy. As per a data and analysis of telecom companies, it is also expected that COVID-19 will boost developments in advanced digital infrastructure systems, and may result into the demand of 5G technology.

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