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© STL Partners | Proprietary and Confidential 1
COVID-19: Impact on telco priorities & future scenariosWebinar #2
05/05/2020
© STL Partners | Proprietary and Confidential 3
COVID-19: Impact on telco priorities & future scenarios
Amy CameronSenior AnalystSTL Partners
Andrew CollinsonResearch Director
STL Partners
Dean BubleySenior Associate
STL Partners+
Disruptive Analysis
Dr. SukantMohapatraEnterprise
Innovation and 5G Solutions
Verizon Wireless
Dr. Rainer DeutschmannGroup Chief
Operating OfficerDialog Axiata PLC
60 minute webinar: Tuesday 5th May 2020 15.00-16.00 UK time
© STL Partners | Proprietary and Confidential 4
Agenda1. How telcos priorities are changing in response to COVID-19
2. Some long term scenarios for 2025
3. Q&A session
© STL Partners | Proprietary and Confidential 5
COVID-19: Context
• First report published in March 2020
• Webinar Wednesday 1st April 2020
• We are now conducting follow up
research on telco priorities
© STL Partners | Proprietary and Confidential 6
Our view: It is a long term disruption
The COVID-19 pandemic is not a short-term disruption
Telcos are doing good things
The crisis will accelerate Coordination Age trends
But 5G spending may be more cautious
Telecoms should enhance its focus on new customer needs…
…and make it an opportunity to accelerate and embody positive changes
© STL Partners | Proprietary and Confidential 8
Background to the survey
https://www.surveymonkey.co.uk/r/covidimpactapr20
Telco, 39%
Vendor, 31%
Other, 30%
Respondents by company type
Europe, 45%
Americas, 40%
MENA, 5%
AsiaPac, 10%
Respondents by market area
These results include 167 people’s input up to 1pm UK time, 5th May 2020.
© STL Partners | Proprietary and Confidential 9
Background to the survey
https://www.surveymonkey.co.uk/r/covidimpactapr20
These results include 167 people’s input up to 1pm UK time, 5th May 2020.
C-Level, 10%
VP/SVP/Director, 35%
Head of/Senior Manager, 21%
Manager/Exec, 34%
Respondents by level
Product, 18%
Management, 24%Strategy,
26%
Analytical, 19%
Business Development,
13%
Respondents by function
© STL Partners | Proprietary and Confidential 10
Automation is a clear priority
-40% -20% 0% 20% 40% 60% 80%
Network cloud: NFV, SDN, etc.
Cloudification of core systems (BSS, OSS, etc.)
Telco Edge
Artificial Intelligence and analytics (AI, ML, etc,)
Automation
% who said 'uplift' scored +ve, 'delay/cut' scored -ve
Technology expectations - distribution
Minor delay/cut Major delay/cut Minor acceleration/uplift Major acceleration/uplift
These results include 167 people’s input up to 1pm UK time, 5th May 2020.
© STL Partners | Proprietary and Confidential 11
COVID-19 adds urgency to operators’ automation priorities
Short term automation priorities
Long term goals
Network optimisation to
handle changes in usage patterns
More predictive and efficient
management of field workforce
Responses to COVID-19 induced
challenges and opportunities
Closing the loop on as many end-to-end
processes as possible
Ensuring roll out of 5G doesn’t disrupt
pre-existing automation efforts
Accelerating automation of customer facing services
• digital sales channels• automated customer care• self-installation solutions
Making use of automation (and AI) tools part of employees’ every
day work
© STL Partners | Proprietary and Confidential 12
Network development: Polarised views on 5G
While on balance negative for 5G activities, there is a significant spread of views
-60% -40% -20% 0% 20% 40% 60% 80%
Core, trunk and backhaul network upgrades
4G mobile access network
5G mobile access network
Fibre access network
Network resilience
% who said 'uplift' scored +ve, 'delay/cut' scored -ve
Network development - distribution of views on likely near-term changes
Minor delay/cut Major delay/cut Minor acceleration/uplift Major acceleration/uplift
These results include 167 people’s input up to 1pm UK time, 5th May 2020.
Prerequisite for 5G deployments
© STL Partners | Proprietary and Confidential 13
-40% -20% 0% 20% 40% 60% 80% 100%
Security services
Conferencing, VPNs, etc
SD-WAN and NaaS offerings
Data monetisation services (population movements…
Industrial IoT and Manufacturing
Transport and logistics
Digital health solutions
Retail
% who said 'uplift' scored +ve, 'delay/cut' scored -ve
B2B expectations - distribution
Minor delay/cut Major delay/cut Minor acceleration/uplift Major acceleration/uplift
Healthcare, security and conferencing services lead the priorities in the business arena
Se
rvic
es
Ve
rtic
als
These results include 167 people’s input up to 1pm UK time, 5th May 2020.
© STL Partners | Proprietary and Confidential 14
Security, entertainment and education lead consumer services priorities
-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70%
Entertainment services
Education services
Financial services
Smart home
Consumer cybersecurity
% who said 'uplift' scored +ve, 'delay/cut' scored -ve
Consumer services expectations - distrubution
Minor delay/cut Major delay/cut Minor acceleration/uplift Major acceleration/uplift
These results include 167 people’s input up to 1pm UK time, 5th May 2020.
© STL Partners | Proprietary and Confidential 15
Drives for innovation and market understanding appear to be boosted
Encouraging – but is it real?
-60% -40% -20% 0% 20% 40% 60% 80%
Understanding customer needs and marketopportunities
Innovation and development
Sustainability / carbon reduction
Transformation programmes
Training, development and learning
Recruitment to address skills gaps
% who said 'uplift' scored +ve, 'delay/cut' scored -ve
Leadership - change expectations
Minor delay/cut Major delay/cut Minor acceleration/uplift Major acceleration/uplift
These results include 167 people’s input up to 1pm UK time, 5th May 2020.
© STL Partners | Proprietary and Confidential 16
Longer term: 2025 scenarios for post-CV19 telecomsCollaborative global response
Fragmented / isolated national responses
Time to recovery (effective treatments and stable economy)
Weak and distanced
Stronger than before
Back to (almost) normal
Fragmented recovery
Impact on the telecoms industry
Negative Positive
Current best-estimate of mid-term outcome. Very dependent on vaccine, 2nd wave of virus & economic rebound potential
© STL Partners | Proprietary and Confidential 17
Each scenario will impact the telecoms industry differently
Market area Back to (almost) normal
Fragmented recovery
Weak and distanced
Stronger than before
5G
Fixed networks
Finance and ownership
Consumer services and content
Enterprise and verticals
Regulatory focus
Internet / cloud services
IoT
Other tech and services
The Coordination Age
Improved outlook for telcos
Somewhat improved outlook for telcos
Similar outlook for telcos
Somewhat worse outlook for telcos
Worse outlook for telcos
Legend
© STL Partners | Proprietary and Confidential 18
Key signals & indicators for telecoms scenarios Negative signs Positive signs
Medical / healthcare Winter / seasonal wavesHealthcare failuresHigh/fast reinfection rates
Immunity provedProven treatments / vaccinesWidespread testing / tracing
Population & society Lockdowns reimposedLogistics challenged/failSlow behavioural shifts
Lockdowns liftedFlights resumeNext-gen WFH & remote education
International relations More geopolitical tension Borders & flights openCollaboration on healthcare and trade
Economic situation Q3 GDP & employment fallsFinancial / debt concerns
Signs of V/U-shaped recoveryConsumer spending rebound
Government + telecom Delayed spectrum releasesInflexible regs / competition rulesPrivacy abuse / authoritarianismTechnology islands & divergence
Relaxed planning lawsSmart City accelerationAction on Internet equal-accessIoT (eg pandemic-proof building codes)
Business Stagnation & conservatismLower productivity / higher costs
Renewed transformation / automationNew sectors / unicorns emerge
© STL Partners | Proprietary and Confidential 19
Thank you!To discuss any of this content in more detail please get
in touch:
Amy.cameron@stlpartners.com
Andrew.Collinson@stlpartners.com
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