Lockdowns prove that telcos need to adapt as new needs arise
As a global, social experiment, Covid-19 has shown that traditional telecoms firms need to expand their services, writes Abhishek Kapur
SA’s telecoms companies (telcos) need to rapidly evolve by adding additional services for a new mobile working and learning world to stay relevant and profitable.
The legacy business model of telcos, which has long sold data and SMS packages to consumers, is no longer enough on its own — a fact that has been brought in to stark relief throughout the Covid-19 lockdown.
In SA, the telecoms industry is mostly a business-to-consumer (B2C) service. During the lockdown, most telco stores were forced to close. As people were unable to do the normal interactions with their providers, such as SIM activations and SIM swaps, call centres were under pressure.
There was likely also less demand for general telco offerings. People switched to using collaborative online work services, such as Microsoft Teams, Zoom, and Google’s G-Suite for messaging, video conferencing and voice calls. Telcos, were elbowed to the side.
Telcos, like many other businesses impacted but the coronavirus pandemic, are likely to face cash flow and cost management pressures if they remain as just a “pipe” for calls, messages and data.
As the working world has now changed for good, telcos must become much smarter and see themselves as problem-solvers for remote workers and businesses that are struggling to adapt. The world has changed, so they too need to change, or risk being left behind.
But they now have an opportunity for a new growth story as a much wider digital services provider.
It begs the question whether bricks-and-mortar schools are really necessary when learners could simply go online for their lessons
Lockdowns the world over amounted, in effect, to a global social experiment and the outcomes were revealing. Many companies have told workers they should become permanent remote workers. There is therefore an unprecedented opportunity to service the remote work force as the business enterprise changes to offer business to business (B2B) services on a large scale.
Globally, a significant widening of the traditional telecoms basket of services to a deeper ICT portfolio, and greater adoption of these solutions as businesses go digital, are forecast.
For instance, telcos could provide services different from but adjacent to their core offering, such as enterprise data analytics, cyber-security, cloud services, and payments services enabled by blockchain. They can also help companies manage cash flow better and bring costs down, which will be a widespread challenge as the global economy struggles to recover.
As these services mature and become more common in the future, SA operators are likely to need greater numbers of people and expertise to support the demand at scale.
Education and healthcare offer further opportunities for telcos. We’ve seen children the world over adapt well to online classes and remote schooling. Many universities have opted to delay physical classes until mid-2021; perhaps longer. Many may adapt their teaching models permanently.
In SA it has been exciting to see how the sector has positively contributed to the education crisis caused by Covid-19 by ensuring that learners across the country, especially the matric pupils in public schools, aren’t negatively impacted by the social-distancing regulations in place.
It begs the question whether bricks-and-mortar schools are really necessary when learners could simply go online for their lessons. This way, time and costs could be saved. It is a massive opportunity worth exploring and could pave the way for a fundamental advance in the way learners are taught.
Telcos are also proving useful in rapidly broadcasting SMS health information to the public during the lockdown. This kind of public health service could be further expanded and used not just for emergencies but rather for ongoing communications between people and healthcare providers.
In other emerging economies, such as India, smartphone apps are used for two-way health communications with health authorities by receiving medical advice and health reporting. They have gone way beyond just receiving texts and are dynamic tools for reporting, advising and responding in almost real time to manage a nation’s health. SA now has a similar opportunity.
Since the lockdown was announced, the government has implemented many encouraging changes and reforms in telecoms to address our economic and infrastructure challenges. The department of communications and digital technologies has been successful in bringing the industry together to help resolve infrastructure problems much quicker, and to provide telecoms infrastructure support where needed.
The sector has and will continue to play a crucial role in supporting the government and the various communities in SA during the lockdown and beyond at its potential is further developed.
• Kapur is EY Africa telecommunications, media and technology leader.