1、NOWNEXTOUTMANEUVER UNCERTAINTY August 2020 NOWNEXT Regaining eminence and emerging stronger Navigating the human and business impact of COVID-19 in the communications industry 2 Contents INTRODUCTION CHAPTER 1: GLOBAL CONTEXT CHAPTER 2: COMMUNICATIONS INDUSTRY IMPACT CHAPTER 3: EMERGING STRONGER, WH

2、AT TO DO NEXT 3 8 16 45 INTRODUCTIONINTRODUCTION 3 4 OUTMANEUVER UNCERTAINTY Since the outbreak of the COVID-19 pandemic, communications businesses have played a crucial role in keeping the world working, connected and informed. As a result, the research we have conducted shows that communication se

3、rvice providers (CSPs) have increased the trust consumers and businesses place in them. CSPs have asserted their relevance and regained eminence as customers recognize that the services they provide enable their economic and social well-being. As countrywide lockdown measures are lifted, economies a

4、re re-opened and the world enters a new phase, CSPs can emerge stronger by building on that trust and relevance and developing new partnerships, products, services and business models to help people live, work and play in the Never Normal. 5 CSPs have played a crucial role in keeping our societies a

5、nd economies functioning since the outbreak of COVID-19, now they have an opportunity to build on trust and relevance gained Moving from Rapid Response to Never Normal CSPs have enabled loved ones to stay connected and economies to function since the COVID-19 pandemic began. The essential backbone t

6、hey provide has proven resilient and has enabled more than a billion workers and students in a matter of weeks to work and learn from home. As the world has changed, it opens new possibilities and opportunities for CSPs to emerge stronger by helping the world live, work and play in new ways. In our

7、first Communication percentage plausibly working from home based on Dingel C-19 occupational risk based on Visual Capitalist. Phasing the reopening of industries requires an understanding of the number of jobs in each industry, the proportion of those that can plausibly be performed from home, and t

8、he potential occupational risk from exposure to COVID-19 balanced against how essential it is to society. 40 41 Any future hybrid strategy must prioritize employee wellbeing and collaboration Re-inventing the office Before the pandemic, offices were critical to productivity, culture, and collaborati

9、on, as well as a tool for winning the war for talent. Many CSPs built large-scale campuses and competed for prime office space in the city centers, leading to high employee density. In todays world, with social distancing a requirement and restrictions on physical movement, the office experience req

10、uires re-invention. A recent MIT survey indicated that employee interactions are narrowing, with people exchanging more messages within a smaller pool of contacts leading to opaque social bubbles.64 Organizations are also concerned that employee ideation and innovation is more challenging in a virtu

11、al environment without the possibility of serendipitous conversations with colleagues around the water cooler. Employee needs and new leadership skills While 48% of employees have highlighted remote working to be more effective, the lack of physical connection with colleagues has resulted in increas

12、ed stress and anxiety levels with 70% of employees signaling the importance of employer support for their mental wellbeing during the crisis. 65 Remote and hybrid working also require new leadership skills. Research has found that more than half of managers feel that they have not been able to suppo

13、rt their employees working remotely in the same way they previously had done so in the office.(3) While remote working has many benefits, there are workforce implications that need to be addressed and CSP leaders must develop a long-term vision and workplace strategy for the future of their organiza

14、tions. 28% of employees say that their mental health got worse during the pandemic.66 2 in 5 employees say their managers have met or exceeded expectations on checking in on their mental wellbeing.66 0101 42 Despite rising demand, changing usage patterns and new use cases, CSP networks have been res

15、ilient 03 Networks have been resilient despite the increase in demand due to COVID-19 New use cases are gaining prominence due to the COVID-19 crisis Mobility restrictions have led to new consumption patterns Internet access patterns have shifted from high density business districts, like city cente

16、rs and business parks, to residential areas like suburbs and outlying towns. There is also a shift in traffic from mobile to fixed line as people spend more time at home on Wi-Fi networks. 10% decline in internet traffic In office areas.69 20% increase in internet traffic in residential areas.69 5%

17、decline in internet traffic in campuses.69 50%-70% surge in total internet hits in the first month of the crisis with continuing high levels of demand.67 74% global consumers perceive mobile networks to have performed the same or better during the crisis than before.68 76% consumers say they are sat

18、isfied with their fixed broadbands overall performance during the crisis.22 The healthcare system has benefited from improved response times, patient monitoring and remote collaboration due to the application of technologies such as 5G. Countries and healthcare providers are looking to use technolog

19、ies to reduce the burden on the healthcare system arising due to COVID-19. 90% of physicians used some form of telehealth service during crisis.70 60% of physicians plan to continue using telehealth practice even after the crisis.70 0202 43 Investment in capital infrastructure and next generation ne

20、tworks is set to rise “. a rapid acceleration of our FTTP build with a target of 20 million premises passed by the mid- to late- 2020s, including a significant build in rural areas.” Philip Jansen BT CEO “We are also bringing forward AUD 500 million of capital expenditure planned for the second half

21、 of the fiscal year 2021 into calendar year 2020. This investment will increase capacity in our network and accelerate our roll out of 5G. This will inject much-needed investment into our economy at this time.” Andrew Penn Telstra CEO After initial disruption, 5G deployment is back on track State sp

22、onsored economic recovery plans to accelerate deployment of fiber 96% expected CAGR of 5G investments up to 2022.71 When lockdowns were initially imposed, 5G rollouts were disrupted as a result of challenges obtaining government permits and sourcing equipment, with supply chains ground to a halt. A

23、number of countries also postponed spectrum auctions further delaying network deployment plans. As economies have reopened, 5G plans are back on track with 22 CSPs launching commercial 5G services in Q2. CSP spend on 5G infrastructure is expected to scale faster and peak higher than initially antici

24、pated due to increased government investment in next-generation connectivity across many countries including China, U.S., Japan, South Korea and Singapore, to name a few. 12% increased growth in global FTTP CAPEX in 2021 compared to pre COVID-19 estimate.72 Governments across the world are making co

25、mmitments to increase spending on FTTX deployment as part of their economic recovery and stimulus plans. The exodus out of cities across many countries has brought into sharp focus the absence of fiber connectivity outside of densely populated urban locations. For example, the UK plans to invest GBP

26、 5bn into the rollout of full-fiber networks given the current coverage (12%) is significantly below their European neighbors.73 In the Netherlands, KPN is planning to accelerate the rollout of fiber to reach a target of 1mn (FTTH) passes in the Netherlands by the end of 2021.74 FTTX Deployment5G De

27、ployment 44 CHAPTER 3: CHAPTER 3: EXECUTING TO WIN, WHAT TO DO NEXT 45 Communications organizations must now build on a successful rapid response to COVID-19 and take steps to capitalize on consumer trust and regained eminence to build a new relationship with consumers, reasserting their relevance a

28、nd supporting acceleration to a post- COVID-19 world. 46 Our framework aims to support profitable growth for CSPs responding to the COVID-19 crisis and provide clear guidance for leaders in the communications industry on how best to outmanoeuvre uncertainty at this critical time, as they shift from

29、rapid response to future business resilience. The Emerge Stronger framework has been developed based on our market insights, client engagements and data from our research organization. The framework is focused on emerging revenue and growth drivers, elevating the customer experience, building a digi

30、tal workforce, capturing the promise of the pervasive network and leveraging the power of the cloud across the entire business to support CSPs to emerge stronger from the COVID-19 crisis. A detailed analysis conducted by HBR after the last recession highlighted that companies with a comprehensive fo

31、cus on growth, operational efficiency and asset strength similar to our framework emerge far stronger from economic downturns on both growth (+13.0%) and profit improvement (+12.2%) post crisis than other firms who focused on performance improvements through employee reduction and organizations that

32、 were unidimensional in their focus on either only growth or asset expansion. We have developed a comprehensive framework aimed at supporting CSPs to emerge stronger from the crisis New Growth Opportunities 1.As remote working is normalized with 75% workers wanting to continue working from home, CSP

33、s can take advantage of billing relationship and ecosystem partnerships to sell enhanced connectivity, security and remote working solutions. 2.Increased trust and the home now acting as a central service hub for living present a secondchance for CSPs to increase their relevance in the Future Home s

34、ignificantly by placing the user at the center with 46% consumers choosing CSPs as their preferred smart home provider. 3.CSPs can become the powerhouse of SMB digital transformation by partnering with local service providers and becoming ecosystem orchestrators for localized software solutions whil

35、e re-inventing retail to support local business. 4.COVID-19 is accelerating investment in connected industry solutions and digital transformation of public services where CSPs can play a strategic role, with the Telemedicine and online education markets expected to grow at 20% and 29% p.a. respectiv

36、ely End of Life Platforms Siloed stacks with duplicated functions Legacy impeding innovation No clear target state FROM - CURRENT: FROM - CURRENT: FROM - CURRENT: FROM - CURRENT: FROM - CURRENT: TO TELCO TECH: TO TELCO TECH: TO TELCO TECH: TO TELCO TECH:TO TELCO TECH: Supporting Modern SW Engineerin

37、g Decoupled and microservice-based architecture Technology simplification Open Platforms for ecosystem contribution Ill Defined Processes with too many Handoffs Heavy on waterfall Friction internally (Dev/Ops ) 5.5% revenues from physical retail channel; 47% opex/revenue ratio for retail stores 36.

38、37. growth-for-public-cloud-services 38. http:/www.oecd.org/coronavirus/policy-responses/coronavirus-COVID-19-sme-policy- responses-04440101/ 39. https:/www.newyorkfed.org/medialibrary/media/research/current_issues/ci17-4.pdf 40. Assumptions: Total SMB revenues for 2019 assumed to be USD 183.6bn; Ex

39、pected growth in overall SMB revenue for the period 2019-21E assumed to be flat i.e. 0.0% p.a. 21. Accenture C&M COVID-19 Consumer Insights, May 2020 22. Accenture Communications & Media COVID-19 Consumer Study, May 2020 23. 24. relief-package-to-tackle-COVID-19-across-its-operations/ 25. 26. 27. 28

40、. performance/?utm_campaign=Ookla%20Insights%20Blog%20Subscription&utm_sourc e=hs_email&utm_medium=email&utm_content=85623602&_hsenc=p2ANqtz- D7CNVfwCg1_a4m92- epX4rZkNhNBo8XPMIDs55gsGCAmezQGgohKqbEEHZRSkWNzpuPpLINiKi_97jRCsEUwn 8yXQ2g&_hsmi=85623602#/ 29. https:/www.weforum.org/agenda/2020/06/coron

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49、Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer _sig=AQAAALZBU9RkVKFxJNsZCUf_hC8XiFl_4gFw7m_12JWpowrqQjroVzdwSrZirMXgub VZjU2aO6QVrJBao5MmJi1cld5f3eT4XuAfj7HcU8vRsb7wklJcFhdK2zj9jtcSlOF0 xKIpuutfZ 29hMUOyhWCJdv8JxJyjFt4dh6tO-OJDr-Jp&_guc_consent_skip=1597167356 86. co-pod/2019/09/ 87. Market-2020-2024-Rising-Demand-Decentralized To help our clients navigate both the human and business impact of COVID-19, weve created a hub of all of our latest thinking on a variety of topics. Each topic highlights s