COVID-19 Effects on Telcos: Not all of it is negative

 

 

I had a Facetime chat with our Director of Marketing, Chris Wilder, this week about the COVID-19 outbreak and its impact on our society. It is safe to say the way we communicate, the way we work, and the way we live has forever changed. I ask myself, is all of it negative? Is there a silver lining for us after the pandemic? 

 

I was curious to learn Chris' thoughts on what is happening in our world, and how the industries we work in will be affected by the virus. With his extensive experience as a Senior Analyst covering security and communications and 25+ years working in IT, I wanted him to zero in on how the telecoms world is navigating through it. 

 

Here is what Chris believes is happening in the telecommunications industry right now, and what he predicts will occur beyond COVID-19. 

 

Guess what, not all of it is negative. 

 

Tania: How is COVID-19 affecting the telecommunications industry now? 

 

Chris: With everyone working from home and households becoming more dependent on broadband, service providers see massive spikes in connectivity at the top and bottom of every hour as customers log onto their web conferences, putting a tremendous amount of strain on their infrastructure.  

 

Interestingly enough, the COVID-19 outbreak has recently exposed that many telecommunication providers were utterly unprepared for the broadband traffic. Right now, telcos must upgrade their infrastructure by buying new systems and investing in new hardware to be able to support sudden usage spikes effectively. 

The last mile in telecom infrastructure is being crushed not only by consumers logging onto web conference platforms at the top and bottom of the hour. Additional strain is put on the last mile by millions of people streaming movies on Netflix, watching YouTube videos, and accessing other online content to pass the time. This demand is putting increased pressure on these service providers to keep customers happy by keeping them connected. 

 

Tania: What are the telcos doing to combat COVID-19? 

 

Chris: In the United States, telcos are not allowed to gate their content, so they have to do the best that they can with their current constraints. In an attempt to solve the bandwidth challenge, telecoms are building more capacity to support spikes in their networks. Doing so can be done in a variety of ways - through expanding their existing data centers and building out from there, or acquiring additional capacity from hosting companies and public cloud providers. These companies have built their networks to be able to handle the surges and sell excess bandwidth to telecom providers that need it. 

 

In the second half of the year, we will see telcos future-proofing their networks and be better prepared for unlikely events like this again.  

 

Tania: What does this mean for the telecommunications industry post COVID-19? 

 

Chris: Telecom service providers are going to realize that this is (hopefully) a once in a generation problem, and it is going to push them to build out and rework how they deliver services. They will have the ability to get some legislative work done to protect their networks going forward and make plans to be able to scale more effectively because they are now dealing with the worst-case scenario. 

 

Another positive outcome is that we will begin to see companies cooperating more than ever before. Independent software vendors (ISVs) and telco providers. OTT providers and telcos too. As the weeks progress, it is going to look more like a unified ecosystem as opposed to competitors fighting with one another. Business competitors will collaborate and use coopetition strategies to maximize results. Additionally, a lot more broadcasters will invest in content (like Netflix, Disney+, and Hulu currently do) because they do not want to lose out on that revenue. They also want to profit by charging for their content and get paid for it. 

 

If you would like to learn more about Kontron in telecommunications, please contact us at communications@kontron.com.

 

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