IDC forecasts worldwide spending on telecommunications and pay TV services will reach nearly US$1.6 trillion in 2020, a 0.8% drop compared to 2019. IDC says the decline will continue in 2021.
IDC expects the decline to continue in 2021, but at a somewhat lower degree.
The telecommunications services industry is proving to be one of the most resilient sectors of the global economy during the COVID-19 crisis. The anti-pandemic measures imposed by many governments that have forced people to stay at home and reduce face-to-face interactions have increased the consumption of telecom services.
However, the economic impact from shutting down businesses, higher unemployment, frozen tourist activities, and reduced consumer spending on non-essential products and services will have a negative impact on the market.
The mobile segment, the largest segment of the market, will post a slight decline in 2020 due to lower revenues from roaming charges, less mobile data overages due to the stay-at-home situation, and slower net additions, especially in the consumer segment.
Fixed data services spending will increase by 2.9% in 2020 as the need for more fixed Internet connectivity determined by the "great lockdown" is likely to help this segment maintain growth.
Spending on fixed voice services will continue to decline and will take an additional hit due to the pandemic as users will likely drop fixed voice services for savings purposes.
Fixed IP voice will survive longer as the service is included in bundles in most cases. Pay TV services will be boosted by the lockdown, but also affected by the economic downturn, so the spending in this category is expected to decline slightly.
The COVID-19 pandemic has changed some trends in the global telecom services market. Operators have quickly adapted to the forced changes in customer behaviour and temporarily pushed aside some earlier priorities.
"As the 5G revolution is being put on hold or delayed by the pandemic, the already proven technologies and business cases will keep the ball rolling in these uncertain times," said Kresimir Alic, research director with IDC's Worldwide Telecom Services team.
"Hosted VoIP/UCaaS, collaboration tools, SD-WAN, IoT, along with network optimization and increased reliability will keep consumers and businesses connected during the tough days of pandemic and global recession," concluded Alic.