May 13, 2020
Beyond COVID-19: Reimagining the Future of Telecommunications
By Byron Clatterbuck, CEO at SEACOM
The world is currently facing a catastrophic health crisis. But beyond that, a dramatic reshuffling of the global economy, society and life as we know it is also taking place. Our priorities, predictions and planning are entirely different now as we try to not only survive the pandemic, but also to think about what a post-viral era will look like.
In response to leaders across all sectors asking what it would take to navigate the crisis and beat
COVID-19, McKinsey & Company recommended a call to action across five stages: Resolve, Resilience, Return, Reimagination and Reform.
Inspired by their research and responsive thinking, I would like to take these insights a step further into the ICT space – proposing five critical horizons the telecommunications sector needs to consider in order to begin navigating what may come next.
Addressing and resolving immediate challenges
Undoubtedly, one of the biggest strains on the communications industry right now is how to manage the changing connectivity requirements of users. With a nationwide lockdown in South Africa and the closure of offices and social gathering sites, people now rely solely on their mobile devices or FTTH connections to remain online, work remotely and to socialise.
Vastly more amounts of data are required over mobile networks and handsets, increasing data flows via mobile base stations and thus using more capacity on metro and national fibre backbones. And for FTTH, this means that, while many companies have generously offered to upgrade bandwidth for their home-user customer base, the backbone networks that carry this traffic are becoming congested, and some are having a hard time coping with the traffic loads. The mobile networks in particular, are struggling to adjust to the high throughput requirements caused by the “work from home” directive.
To top this off, recently two key high-speed international subsea cables stopped working – SAT-3 was undergoing repairs, and the WACs subsea system suffered a cable cut. As a result, almost 50% of South Africa’s international data transmission routes were temporarily cut-off and were thus unable to transmit data between the continent and Europe. Fortunately, the East Coast of Africa’s cable systems like the SEACOM and the EASSy cable systems ensured that South Africa’s international data traffic could still run along Africa’s east coast, holding up most international connections to the rest of the world.
For these immediate challenges, it has been a bit of a scramble with telecommunications providers trying to upgrade and add more capacity where it is needed, switch capacity transmission routing to alternative paths and reassure customers that connectivity will stay up and on. Fortunately, the high-capacity WACs cable was repaired and put back in service on April 6, 2020.
Most governments have identified how critical communications, particularly reliable data communications, are to an economy and a society; and as such, telecommunications services are classified as being an “essential service” that can still operate under emergency conditions. Our sector plays a key role in civil society – without the Internet, learners couldn't complete the academic year and hospitals couldn’t refer tests and screenings to specialists. Our very existence and ability to adapt to change is driven by, and enabled through, the Internet.
Having said that, it takes time to redesign networks that were originally built to deliver high-speed capacity to large office buildings, to now redirect that bandwidth to the numerous households of staff working remotely. Gathering teams together in a centralised location to collaborate and share costs is the very reason we have offices in the first place. So, decentralising data connectivity will naturally increase costs and decrease efficiency in the network design – two factors we need to consider in our resolution.
Building resiliency for knock-on effects
Consumers and businesses, as a result of the pandemic, unfortunately now have less money to spend and are concerned about saving and retaining what money they do have in order to survive. Ultimately, both groups are looking to manage costs and avoid any unnecessary expenses during this difficult time.
Mobile phone and FTTH users will continue to want and need data connectivity, viewing it as vital to keep their lives and businesses on track, and therefore, will continue to pay their suppliers as it is unlikely that anyone will risk being cut off from the Internet during this crisis. While business users on the other hand may begin to reconsider their office voice and data needs, their offices will largely be without employees making use of these services. In turn, smaller ISPs may suffer as customers delay payments, and they in turn won’t be able to pay the larger ISPs that support and provide services to them, and so the domino effect continues.
Even though telecommunications are considered an “essential service” this doesn’t mean that every business customer is also providing an essential service, and unfortunately, many offices will remain closed. As a result, new fibre installations will slow new deliveries, new billing growth will drop, and gradually revenue growth will slow too.
Smaller ISPs that don’t have cash reserves to deal with this slowdown will struggle to manage their cash flows, with larger players taking a knock too. More diverse providers with consumer, business and wholesale customers across broader markets will likely fare better.
If this crisis has taught us anything, it’s that planning is key, and we must learn and adapt as we go. Businesses and governments now have an opportunity to educate themselves on risk mitigation and scenario planning for future events like this. In our industry, specifically, we can take away the lesson of always adding additional capacity and resiliency to our networks. We are forced to think outside the box, contemplating how to make networks more reliable and yet flexible, allowing their data requirements to move in patterns we didn’t consider before.
The silver lining here is that, had this global pandemic happened a decade ago without smartphones or reliable fibre at home, the fallout for most of society and our economies would have been more immediate and catastrophic. At the very least, this crisis has proved just how powerful and important distributed computing and cloud technology is at enabling civil society services, including education, healthcare and policing.
Planning to return the business to scale
In the telecommunications space, we have to believe that 80% of our lives and businesses will return to normal over the next six months. It is adapting to the 20% that has changed, and changed radically, that we need to plan around. To make sure that while the unexpected can always happen, we should always be prepared to deal with circumstances that have happened before. This means some simple guidelines which will ensure that all key staff in an organisation are able to work remotely if needed, and that all the data and systems that they require are redundant and accessible from remote locations. If anything, the push to true digitalisation has just been given a giant shove by this current crisis.
How we will work, where we will work and the scale and time of what we will do are all things that can’t be planned in exact detail. However, we must challenge our thinking in terms of learning to be flexible and adaptable. And largely this means being able to work remotely and securely if needed. And to ensure that our staff and company are protected and able to survive. The uptick in gigabit-speed Internet to the home, means that more and more companies have come to realise that “work” is what employees do, and not a place that they drive to every day.
One positive learning from this experience is that businesses can continue to take advantage of the efficient “new normal” concepts we have discovered during the crisis. For example, hot-desking saves on office space and utilities; virtual meetings reduce travel time and save on fuel usage and expenses.
Reimagining the new normal and reinventing accordingly
Disasters shouldn’t be the only catalysts for change and finding new and inventive ways of doing things – our ability to adapt in less challenging times is testament to this. The COVID-19 crisis presents business leaders with opportunities to grow, improve their performance and enhance their capabilities.
Most businesses when faced with disaster, immediately resort to extreme austerity measures in an attempt to curb operational expenditure. These streamlined cost structures not only help to weather the onslaught of the ensuing economic storm, but share insight by testing the true value productivity tools, beyond vendor rhetoric and hyperbole. I’m looking at you, meeting-that-could-have-been-an-email.
Telcos will need to conduct basic business prudence and risk evaluations, deciding which costs are fixed and crucial versus variable and non-essential. Gearing companies to be more digital, flexible, scalable, adaptable and customer-centric will make them more resilient against future shocks. Telcos need to look internally at their own organisations and work processes, and evaluate how the greater use of virtual applications and tools can further improve productivity, as well as flexibility in the new normal. These lessons may be able to be applied to other industries, and Telcos can certainly help to guide and enable other industries to understand what is possible to achieve, at what cost, and over what time frame.
Businesses that survive the crisis will have proven that they can remain responsive while adapting to change.
Reforming regulatory and competitive environments
When we start to see data connectivity as an underlying necessity, we should see a lot more industry collaboration and sector support, which will be both to the industry and the broader society’s benefit. The South African Telco industry has come together, as a result of the crisis, as never before, to collectively work on company-wide challenges, such as access to wayleaves, properties for fibre cables, and scarce spectrum. In other parts of the world, limited competition and deployment constraints severely hampered Internet service providers (ISPs) from rolling last mile services on competitive terms. Thankfully, this has not been the case in South Africa, where healthy competition and diversity in providers has meant the general population has been able to reap the proverbial connectivity rewards – whether this has been by way of fixed or mobile broadband. As a result, many South African metros are rapidly closing the gap in broadband Internet speeds when compared with some leading first-world countries.
For mobile operators, this highlights that the spectrum debate has very real consequences. Spectrum efficiencies help mobile networks to improve their reliability, signal strength and ultimately drive end-user costs down. South Africa’s regulator, as response to the pandemic, has cut through the onerous requirements for additional spectrum, vital for the roll-out of 4G and 5G services. This “emergency spectrum” will relieve the strain on mobile networks, alleviating the broadband service demand. This is especially critical for un-serviced and under-serviced locations, assisting both government and networks to ease network congestion. Although temporary, industry bodies are hopeful that the emergency spectrum release will demonstrate the ability of MNOs and government to work collaboratively in the interests of civil society.
As an essential service provider, we have a duty to society but are also acutely aware of the need to keep our employees safe. Currently, operators and networks are working together to support service delivery and government imperatives. And if we can do this in times of crisis, we should be able to do this all the time, just as the regulator has demonstrated in the thorny subject of spectrum allocation.
While we can’t predict how the pandemic will evolve, we can reflect on how things have changed and will continue to do so. Some factors remain outside of our control, but our actions and attitudes are still very much in our grasp. It’s going to take tenacity and innovation to beat COVID-19, but we must prevail if we are to discover what’s next.