4 minute read 25 May 2020
Role of telecom sector during COVID-19

How telecoms and digital infrastructure companies are shaping the new normal

By Prashant Singhal

EY Emerging Markets Technology, Media & Entertainment and Telecommunications (TMT) Sector Leader

Spearheads growth strategy in rapidly converging Technology, Media and Telecommunications (TMT) ecosystem.

4 minute read 25 May 2020
Related topics COVID-19 TMT

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  • Building a resilient enterprise: Now, Next and Beyond

Now more than ever, the telecoms sector is playing a crucial role in keeping India connected during the crisis.

The world has changed dramatically in the past few months. The novel coronavirus is upending human society. Connectivity has been the greatest enabler to social engagement amid this crisis. It is bridging barriers of social distancing to bring billions of people together through voice and data connectivity. Data consumption is shaping the new normal. Data usage has surged nearly 25% in India, setting the stage for transforming the lives of 1.3 billion Indians. People are spending more time on their smartphones – streaming content, buying essentials, playing games, using social networking apps, and cloud applications to work from home.

IA opportunities and our offerings

Now more than ever, the telecoms sector is playing a crucial role in keeping ‘India connected’ - empowering people, start-ups, Small & Medium Enterprises (SMEs) and large corporates to replace physical dependencies with digital infrastructure.

From now to next and beyond, the trickle impact is set to shape a new normal. Digital adoption is expected to cascade further and drive a fundamental change in how businesses function and people lead their lives –  gaining a more pronounced role in the times to come.

On the radar: challenges for telecom and digital infrastructure providers

The crisis has unfolded many challenges for the telecoms and digital infrastructure companies. Building the digital infrastructure to support new ways of remote working and accelerate the digital way of life will require collaboration from all stakeholders. Now is the time to think about the future and enable the transition from ‘digital-first’ to ‘digital-throughout’.

From now to next and beyond, the industry will need to respond to several common challenges to shape the future of a digital and well-connected India.  Considerations will be required toward:

  • Customer and brand: navigating complexities for to accelerate connectivity for all – building resilience in customer onboarding and service management through digital channels
  • People and workforce: Institutionalizing new ways of working for their employees, and enabling companies to shape the future of secure remote working
  • Supply chain: Optimising supply chain dependencies and countering volatilities in equipment and labour construct
  • Finance and internal controls: Revenue and cash management, including rapid cost take-out initiatives and robust internal controls for business continuity

Shifting focus on growth levers to ride digital habits

Telecom and digital infrastructure companies can shift gears and focus on growth levers to capitalize on evolving digital patterns. The opportunity to capitalise new revenue streams and drive cost efficiencies will go a long way in normalising sector performance to a pre-COVID EBITDA run rate (Earnings Before Interest, Tax, Depreciation and Amortization).

Opportunities to position customized solution portfolio for SMEs including advanced connectivity and cloud services, strengthening platform play through vertical partnerships, and enhanced B2C proposition exhibit potential. With that, relooking at cost models to focus on cash conservation, reduction in operating leverage and improving cost efficiencies will assume importance.

The report titled ‘Building enterprise resilience: Now, Next and Beyond’ highlights an eight-pillar framework with considerations for the sector to navigate the Now,  and plan for ‘Next’ and ‘Beyond

IA opportunities and our offerings

Managing the crisis could be an inflection point for the telecoms value chain. Now is the time to plan and take the lead in strengthening the digital spine of connected India. With the right mix of accelerators, telecom and digital infrastructure companies can reverse the impact and normalise performance to a pre-COVID EBITDA run rate.

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Summary

The right thrust to the telecoms sector will help in shaping the future for a digital India and remain competitive on the global stage.

About this article

By Prashant Singhal

EY Emerging Markets Technology, Media & Entertainment and Telecommunications (TMT) Sector Leader

Spearheads growth strategy in rapidly converging Technology, Media and Telecommunications (TMT) ecosystem.

Related topics COVID-19 TMT