Global Telecommunications Network Operators Market Review 1Q20: Impact of the COVID-19 Pandemic in 2020 - Lower Handset and Ad Revenue, Delayed 5G Rollout
DUBLIN, Sept. 11, 2020 /PRNewswire/ -- The "Telecommunications Network Operators: 1Q20 Market Review" report has been added to ResearchAndMarkets.com's offering.
This market review provides a comprehensive assessment of the global telecommunications industry based on financial results through January 2020 (1Q20).
After staging a mild recovery in 4Q19, the industry's top-line growth remained under pressure yet again in 1Q20. Single-quarter revenues declined YoY by 2.2 % in 1Q20, to $446B ($1,813B annualized). Total capex was about $70B in 1Q20, down 1.3% YoY as debt concerns grew, and operators became keen on open networking, cloud partnerships, and asset spinoffs to cut capex. Telco investments in 5G and media slowed.
In the near term, the bigger concern for telcos is the global economy slipping into a prolonged recession. On June 24, the International Monetary Fund updated its forecast for 2020, now projecting global gross domestic product (GDP) to sink 4.9% for the year, and noted that the labor market has been severely hit and at record speed, and particularly so for lower-income and semi-skilled workers who do not have the option of teleworking. A 5% dip in GDP will hit both revenues and capex hard, and more telco layoffs are expected. Further, the manufacture and distribution of network gear will also be delayed, due to supply chain constraints, thus slowing 5G and fiber network builds in the short term.
Key findings from the 1Q20 analysis include:
With the world reeling under the impact of the COVID-19 pandemic, most industries are feeling the heat of this unprecedented situation. Businesses worldwide are faced with a recessionary climate and telcos are no exception. The impact of the pandemic will likely be felt across their operations.
The telecom sector faces supply chain risks, and handset/device revenue will take a hit due to reduced production of 5G smartphones and handset components.
Lower consumer spending due to lockdown in most countries and a rise in defaults on financed handset plans will also hurt revenue generation. On the enterprise side, wireline operations could see revenue declines accelerate due to lower corporate spending and higher unemployment. Telcos with significant media and advertising segments will see revenue declines due to the suspension of upcoming sporting events. Examples include Telefonica, BT Altice and AT&T.
In European countries, 5G auctions anytime in the next several months are next to impossible amid the COVID-19 pandemic; France has already postponed an auction. This will directly affect any near-term sales prospects for the telcos. Looking ahead, TNOs are likely to revisit their capex budgets and slash spending on 5G.
Amid all the bad news, the increase in data traffic and higher demand for virtual private network (VPN) capacity could offer some relief for the operators. Although not immediately, operators are likely to migrate some users in the consumer segment to more premium packages and make attempts to monetize the rise in data traffic.
Key Topics Covered:
2 Market snapshot
3 Market overview
4 Key stats through 1Q20
5 Operator rankings
6 Single-company drilldowns
7 Country breakouts
8 Regional breakouts
9 TNO-138: Revenue, capex and headcount for 138 TNOs
10 TNO-50: Cost and profitability metrics
11 M&A, software & spectrum spend
12 Raw Data
13 Subs & traffic
14 Exchange rates
15 About (including methodology)
For more information about this report visit https://www.researchandmarkets.com/r/cdfans
Research and Markets also offers Custom Research services providing focused, comprehensive and tailored research.
Research and Markets
View original content:http://www.prnewswire.com/news-releases/global-telecommunications-network-operators-market-review-1q20-impact-of-the-covid-19-pandemic-in-2020---lower-handset-and-ad-revenue-delayed-5g-rollout-301127738.html
SOURCE Research and Markets