Scoping the Impact of COVID-19: The Communications Lifeline (Part One)

COVID-19 has radically transformed patterns of customer demand, ways of working, and operating models in the media, entertainment, and communications (MEC) industry, introducing a host of obstacles and headwinds for industry leaders. In this three-part blog series, we’ll delve into the industry-specific changes and challenges—and, more importantly, arm you with insight into what’s next for the industry and how you can harness those opportunities.

In periods of quarantine and isolation, the communications industry is a lifeline for consumers. From broadband access to voice and video functionality, communication is also a fundamental capability for organizations trying to maintain “business as usual” while employees are working remotely. COVID-19 has had an indelible, tangible impact on the communications industry in several important ways.

Increase in call volume and duration: Several of our clients have seen a 50 percent increase in calls and a 40 percent increase in call duration. In response, telecom companies (broadband and wireless) should drive calls to self-service capabilities to lower call center demand and duration.

Your next step: Instead of blindly cutting costs, direct your remaining budget towards self-service workstreams to lower the strain on existing call center support, and reduce the cost for overall support. Any additional spend here can also position your organization for greater success in the future world of self-service.

Rise in streaming: The EU has asked Netflix, Amazon Prime, and Disney+ to reduce their video quality to lessen the burden on European infrastructure after a nearly 700 percent rise in the use of streaming services. Reducing infrastructure burden will be critical as almost all aspects of remote work consume data (even voice and video). Strains at the local, neighborhood, and city block level will worsen without the provision of additional capacity.

Your next step: For broadband, carefully prioritize higher strained nodes first to either add mid-splits, offload some data to wireless channels, or encourage all providers to reduce video streaming quality to assist with higher data demands.

Closing of call centers: U.S. communications companies’ call centers in the Philippines were closed in mid-March due to a lockdown across the island. As the public health impacts of COVID-19 continue to amplify, traditional call centers of significant workforce volume (and, in some cases, even outsourced employees) are shifting to remote work environments. In times of crisis, call centers remain a critical lifeline for customers.

Your next step: Companies must shore up their call-center processes and procedures, including ensuring that all call-center capabilities can be conducted, accessed, and performed from remote environments.  Beyond the immediate scope of COVID-19, these capabilities will set up organizations for greater resilience in the face of future business disruption.

Closing of brick-and-mortar stores: While most communications-owned stores have closed in the U.S., some companies are keeping one store open per 20-mile radius as an essential need for first responders, medical staff, and customers. Companies are diverting all resources, including supply chain, to those stores and online channels. The stores that remain open are running beyond capacity. They must be efficient and equipped to support a growing volume of customer needs.

Your next step: Continue to reroute all resources and supply chain processes to the remaining open stores. Use the downtime in other stores to shore up processes and procedures that were not working and identify how you want to operate once other stores re-open.

Requests by wholesale customers for reduced rates: One of our clients is fielding requests from its wholesale customers to reduce pricing. These requests strain a core revenue stream for the industry, as telecom organizations make money when wholesale customers consume more data. Ultimately, the strain on wholesale customer rates places potential revenue streams across the industry at risk.

Your next step: Work with wholesale customers to better align with long-term needs. Consider looking at mutual offload (wireless to wireline and wireline to wireless) that may benefit each company to ensure that networks stay operational, and do not get overtaxed by consumption.

Given these trends, how should you respond as a communications leader? In the broadband and wireless space, governments have requested—or companies themselves have volunteered to provide—special terms and features, such as waiving late payment fees or data caps on home broadband. While not every company is fully exercising these new features, each communications company realizes that it plays a critical role in “keeping the lights on” for society. Now more than ever, MEC products and services are essential to people’s everyday lives.

Check back for part two in our series, in which we’ll examine the impact COVID-19 has had on media, entertainment, and technology companies and look at how the pandemic is impacting industry valuations.

For more insights on the impact of COVID-19 for the MEC industry, please see part two and part three of our series.