CSPs face brave new world; government stimulate market
The COVID-19 pandemic is expected to persist through at least 2021 as vaccines and other virus mitigation efforts take time to make their way through societies globally. In the meantime, the global economy remains in a state of suspended animation following unprecedented injections of fiscal and monetary stimulus by governments across numerous countries, which total over $20 trillion (or 23% of global GDP in 2019). The amount of stimulus is expected to continue growing steadily through 2021 and potentially beyond as governments aim to fully offset the impact of the pandemic on their economies as well as build a foundation for sustainable economic growth.
After weathering the first phase of the pandemic in 2020 relatively well, communication service providers (CSPs) will enter 2021 facing a brave new world and many tough decisions. The unrelenting virus is forcing economies and societies to fully embrace digital transformation as they adjust to the new normal, and it is forcing CSPs worldwide to take a hard, holistic look at their operational, business and growth models, and to adjust and accelerate their digital transformation road maps accordingly.
Fortunately for the telecom industry, a significant and growing portion of government stimulus is being earmarked to enable the ICT sector to accelerate infrastructure and ecosystem development. CSPs and their suppliers will be key beneficiaries of the trillions of dollars and other support mechanisms (e.g., tax breaks, low or no interest rate financing) governments will directly and indirectly inject into the ICT sector and broader economy for these purposes. This stimulus will help CSPs ease their capex and opex burdens as they migrate to the new network architecture and will ensure they have the capital necessary to keep their businesses going and their debt obligations satisfied.
2021 telecom predictions
- Government stimulus powers ICT investment
- Governments will increasingly democratize spectrum to ensure a vibrant 5G ecosystem
- CSPs accelerate 5G SA road maps
Technology Business Research 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, telecom, devices & commercial IoT, data center, and services & digital.