Covid-19 deals $51bn blow to mobile industry

Covid-19 deals $51bn blow to mobile industry

30 April 2020 | Natalie Bannerman

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2020 Market revenue for the mobile industry is expected to fall short by $51 billion due to the impact of Covid-19.

According to latest figures from global research firm Omdia, global mobile communications services is forecast to reach $749.7 billion this year, down from $781.5 billion 2019 and its previous $800.3 billion prediction for 2020.

Overall, the industry is set to face a fall in revenues of 4.1%, amounting to $31.8 billion.

“Mobile phone companies around the world are experiencing usage spikes as more countries encourage or enforce social distancing and work-from-home rules to slow the spread of the Covid-19,” said Mike Roberts, research director at Omdia.

“However, the spikes aren’t enough to overcome the impact of the pandemic on consumer behaviour. These rules are having a dramatic impact on various regions of the world, halting new subscriptions and upgrades in the United States, while slashing revenue for operators in Europe.”

Unsurprisingly the impacts of the pandemic are also set to affect the rollout out of 5G. Though Omdia have yet to disclose its exact findings in relation to the next-gen technology, it says that global 5G subscriptions will be down 22.1% for the year compared to its previous forecast.

Looking at the regional picture for mobile revenue, the Americas, is set to decline by 3.7% to $237 billion, mostly in the US.

Europe is predicted to be hit the hardest, with mobile service revenue falling 9.1% to $131 billion, this is a downgrade of 9.3% compared to previous forecasts. This is due to reductions in mobile prepaid revenue and inbound roaming revenue.

Across the Middle East and Africa, a 3.9% fall in mobile service revenues to $84 billion is expected, a difference of 8.4% from Omdia’s previous forecast. The biggest factors include the impact of low oil prices on Gulf economies and the fragility of economies and health care systems in parts of Africa.

Interestingly, Asia is the only region not mentioned in Omdia’s findings is Asia but Roberts does comment: “One bright spot is that in China, the first country hit by the pandemic, there are signs that the mobile market and broader economy is starting to come back to life”.

“The massive contraction will clearly impact every segment of the economy, including mobile, but how long it will last in each country and region is virtually impossible to predict.”

Earlier this month, Capacity spoke to industry experts about the financial toll Covid-19 will have on the industry at large.

“We are a projecting a dip in spending this year, largely due to reduced spending in the second and third quarters. Overall, we are projecting a decline of 0.6% in telecom spend in the US this year,” said Courtney Munroe, research vice president, worldwide telecommunications research, IDC.

Click here to read the full analysis.