FEATURE: BUSINESS CONTINUITY
A DEEP IMPACT?
A round-up of the impact of Covid-19 on the optical communications industry from a number of leading analyst firms
KEELY PORTWAY
T
he Covid-19 pandemic has and continues to affect every-day life throughout the world. In the optical communications industry, the first
obvious signs were when events began to postpone, cancel and reschedule. As one might expect, the dedicated industry analysts have been keeping a close eye on the situation and here, Fibre Systems rounds up just some of the reports on the topic. Looking at the state of industry in the last
quarter of 2019 by way of comparison, MTN Consulting focused on technology spend by telecommunications network operators, covering 121 vendors from 2013 to 2019. Te company’s findings were, at first glance,
perhaps not the most cheerful reading, with telco vendor revenues reportedly down two per cent in 2019. While industry hype around 5G ‘came to a head,’ it was noted that spending was constrained by trade wars, supply chain dislocations, and weakening economic outlooks.
16 FiBRE SYSTEMS n Issue 27 n Spring 2020
Even before Covid, factors that were
constraining telco spending included a lack of suitable spectrum for wide-scale deployments; concerns about the cost of new spectrum needed for full buildouts; ongoing uncertainty about the fate of Huawei; vendors’ desire to buy market share, pushing down the size of contracts; the increasing maturity of open networking (O-RAN in particular); and the rising ability of cloud providers and the carrier-neutral sector to help telcos fill out key portions of their network infrastructure.
Working from home With Covid-19, said MTN Consulting, the prospects for 2020 appear to be bleak, with the impact likely felt across their operations. Government intervention may be partially successful in liſting economies, and of course, telcos will benefit from the rush to work from home. Te biggest factor, as with any industry, will be the rapid coming to a stop of entire industry sectors, and the length of time they
will take to get back to normal. However, the crucial point is that economies will recover, and importantly, that telecom networks will stay lit and telcos will still build 5G. On the vendor side, the company expects further merger and acquisition activity and some outright exits from the telco vertical. Telecom will also see new vendors,
potentially through a soſtware or services angle. Overall priorities will be different, but, says MTN, Huawei will continue to spend the most on R&D, employ the most people, buy the most chip and component content, run the most networks, and invest more than others in influence across the industry. Some closing advice to telcos in terms of
investment opportunities includes a reminder to invest heavily in basic communication network infrastructure, as always, but also new areas. Investment priorities should include deploying new technologies in the network, allowing for faster or richer user services and devices (such as 5G); improving economics of
www.fibre-systems.com @fibresystemsmag
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