The COVID-19 pandemic has been imposing unprecedented challenges for the humankind. In order to curb the spread of the virus, governments worldwide have undertaken strict containment measures like curfews, travel restrictions, closing down borders, prohibiting mass gatherings, mandatory quarantines, closure of education institutes, entertainment, leisure zones, and more. However, these containment measures have had a significant impact on economic activities, throwing several industries across the globe into an upheaval. Its impact on the economy has been more negative than anticipated during the first half of 2020, while, outlook for the rest of the year also remains bleak. According to IMF’s latest world economic outlook, the global GDP is anticipated to contract by 4.9% in 2020, which is a further reduction of 1.9% from its earlier forecast. While every vertical industry has been facing their own unique challenges; tourism, real estate, and mobility are the worst hit by the pandemic.
Countries struggling to control the spread of the virus have extended the lockdown or imposed partial restrictions, taking additional toll on their economic activities. Meanwhile, things are gradually easing back to normal in countries where the peak level of infection cases has apparently passed. Countries with high recovery rates are gradually lifting restrictions and allowing people to get back to work steadily. On the other hand, some countries are still holding off on reopening their economy and waiting for the population to recover fully. Despite past several months of uncertainty and other healthcare challenges on hand, governments and central banks around the world has been persistently focusing on implementing fiscal and monetary measures aiming to rebuild their economies. IMF has projected a rebound of the global growth in 2021. One of major factor that will support the economic recovery is the ongoing restructuring of business models with an accelerated shift towards digitalization across industries globally.
How ICT is helping industries to accelerate growth:
From the way we work and interact, to the way we spend our leisure time, a massive change has been witnessed during the COVID-19 crisis. ICT have surfaced as one of the key sectors helping businesses as well as societies to navigate through this adverse situation. It has been the cornerstone for implementing business continuity solutions and at the same time helping individuals carrying out their day-to-day activities. Facilitating remote working, online meetings, online education, digital payments, e-commerce, and remote diagnostics – all have been made possible on the back of ICT infrastructure. Orchestration of hardware, network connectivity, applications, and security has been facilitating the development and implementation of innovative ICT products and services for several industry verticals:
- Healthcare: Traditional healthcare system lacked data and analytics for intelligent reporting. Moreover, data processing was manual, and databases were decentralized. Leveraging automation such as robotic process automation (RPA) and cloud-native applications, healthcare business processes has been improved and streamlined. This sector has been witnessing significant investments in technologies like telemedicine, remote diagnostics and monitoring, big data analytics, and artificial intelligence (AI). This is leading to the development of a smart healthcare ecosystem for dealing with the ongoing crisis, which will further help in mitigating future risk.
- Government: Government in partnership with technology providers has invested in development of several mobile applications for facilitating symptom reporting, tracing COVID-19 infected patients, and also for keeping a tab on the quarantined population. In addition, several app services have been launched for recording and verifying passengers’ past travel history; and issue travel pass or allow them with the access of public transport and other public facilities accordingly. Continued focus of governments in monitoring the situation by leveraging technology will restrict future outbreaks which may further delay the economic recovery.
- Retail: The pandemic has boosted digital commerce activities significantly. Increasing number of retail businesses have set up their digital presence through online marketplaces, as well as online grocery and food delivery platforms. In addition to B2C, e-commerce is penetrating further and enabling several B2B scenarios. Apart from selling through third-party platforms, retail businesses are investing in setting up their own e-commerce platform for improving customer experience.
- Manufacturing: With limited workforce to comply with the social distancing norms, productivity of manufacturers has been hit significantly. However, digitalization leveraging technologies like internet of things (IoT), AI, virtual reality (VR) and augmented reality (AR) has enabled manufacturers to enhance automation of production processes, improve product quality, optimize remote control, and also drive innovative business models. Technology-driven manufacturers, investing in automating labor-intensive processes, will not only drive economic growth but will also be better resilient while facing events like COVID-19 in future.
Telecom’s role in economic recovery in the Middle East region:
The telecom sector has witnessed a significant upsurge in demand for connectivity during the pandemic. Apart from regular communication requirements; consumers have relied heavily on telecom services for online transactions, online gaming, and other digital contents. Moreover, telecom has helped in creating public awareness and provided reliable connectivity for individuals to access medical and other essential services during social isolation. As social distancing is expected to remain a norm going forward, telecom network lays the foundation in mitigating the negative impact of lockdown by enabling citizens to remain connected. While keeping the economy moving during the lockdown, telecom sector will continue to play a pivotal role in rebuilding the economy even after the pandemic. Key measures undertaken by telcos in the region include:
- Enabling remote working and online education: Video conferencing tools and online classroom platforms have been the lifeblood of several companies and educational institutes. With offices closed and travel restrictions imposed, online meetings have helped enterprises from falling apart and continue with their business activities. Minimizing lockdown’s negative impact on businesses, telcos in the region have allocated additional bandwidth and provided free access to OTT applications for supporting business continuity solutions.
- Facilitating critical network connectivity: Telecom operators have rapidly provisioned temporary network connectivity for makeshift health facilities to fight the pandemic. Additionally, teclos have also scaled network investments in order to meet the additional surge in demand for reliable as well as secure connectivity for critical enterprise applications. Along with these services, telcos have also been managing networks for customers, and helping them to operate more efficiently.
- Promoting digital channels: A major push for digital channels like e-shop portals, facilitating customers to place order for telecom products and services has been witnessed amid closure of retail stores. Moreover, operators have spurred investments in digital services like online bill payments, and mobile money transfers. Focusing on automating customer service and facilitating customers with self service, operators are also investing in AI powered voice agents and chatbots.
5G will play a key role in economic recovery post the pandemic:
Telecom operators in the region have been investing heavily in 5G network expansions. 5G supports high bandwidth broadband requirements from enterprises, and is also considered as a superior alternative to FTTx connectivity especially to underserved remote areas. In addition, the backbone of several IoT applications across industry verticals is 5G’s low latency and massive machine type communication. While 5G network slicing is offering flexibility for enterprises by slicing the network into layers, and configuring them as per the end use requirement. Along with 5G, operators are also investing in multi-access edge computing (MEC); enabling distributed computing capabilities at the network edge and driving new growth opportunities. 5G and MEC will support several real-time services and use cases including autonomous vehicles, drones, robotics, AI based video surveillance, gaming, virtual reality and more. Major benefits that 5G offers to industries include optimized operations, enhanced productivity, and reduced operational cost among others. Also, 5G investments will generate new jobs which will further help in the economic recovery. However, effective government frameworks and appropriate regulation will be crucial for optimizing the benefits of 5G for consumers, businesses and the overall society. Key areas that 5G can drive economic growth after the pandemic include:
- 5G in healthcare: Digital healthcare will accelerate post pandemic with applications like remote diagnosis and remote surgery expanding rapidly. 5G will bring productivity benefits in healthcare segment and will accelerate new revenue models by empowering more advanced applications like robotic surgery, advancements in tele-health, and healthcare cloud computing.
- 5G in smart cities: 5G has the potential to cater the advanced connectivity requirement of smart cities. It will empower solutions like smart lighting, intelligent traffic management, etc. It will be the key enabler for solutions like AI powered video surveillance, which can further improve public safety by offering first-responder services. Moreover, 5G will facilitate more efficient disaster management solutions and minimize the economic impact of disasters.
- 5G in oil and gas: Oil & gas operators have digitalized several aspects of their critical routine tasks like remote operation, inspection of facilities, monitoring of leaks, servicing of equipments, etc. 5G will enable several emerging use cases like drone inspection, digital twins, etc., helping in achieving optimum performance, and improving productivity, while minimizing safety risks of digital oil fields.
- 5G in ports: 5G will help transform traditional terminals into smart terminals. It will facilitate deployment of several innovative use cases, focusing on improving automation and operational efficiency. Driving efficiency of port operations, 5G will enable remote operations of critical high risk tasks, and data visualization for workforce training and efficient port construction.
- 5G in manufacturing: 5G can be harnessed to empower IoT solutions for smart factories with a focus on cutting down outages and malfunctions; thereby increase productivity. Additionally, 5G can be leveraged to embed more sensors into machines and use the data collected these sensors for proactive fault prevention and process modification.
Conclusion and future outlook:
Like several other industries, telecom have also faced various challenges like disruption in equipment supply chain, decline in sales due to closure of stores, upheaval in customer service centers, difficulty in new services provisioning amid lack of resource availability, and congestion in network due to exponential surge in traffic among others. Despite these challenges, telecom sector have experienced a boom during the pandemic mainly attributed to increasing demand for greater bandwidth connectivity along with virtual private networks (VPN) and remote working solutions especially from enterprises.
The pandemic has provided telcos with a unique opportunity to accelerate economic growth by enabling a new digital society and launching new innovative solutions leveraging technologies like 5G, MEC, and cloud computing among others. There is no doubt that the world economy will be largely driven by digital technologies after the pandemic is over. However, along with the investment in digital technologies, enabling ICT policies and framework will also be critically important for accelerating economic recovery and improving telecom sector’s contribution in the GDP.
