Corona observations end of March 2020

Below is a listing of the various observations I can think of, concluding in some insights for the telecom business. So here we go:

Dealing with a medical shock with an instant overflow into our daily lives, this is what I see by the end of March, based on my own personal network, consuming news, consultant reports and various social media channels such as Twitter, LinkedIn

First wave consequences, declining supply is leading to reduced demand. Most critical factor is liquidity of households, companies and local government..

• Extreme volatile financial markets (see chart below)
• Crisis management at large, and on all levels. Survival mode, closing factories and airports (Renault, Alstom, ADP in France
•  Large companies will focus on costs control to conserve a “best as possible” 2020 scenario. Telecom, Energy, Automotive, Hospitality
• Payment challenges for all SME and very SME in particular, including sectors as Retail (non-essential), Events, Culture (Museums), Restaurants, Agriculture (Flowers) Bars, Hotels and more
• Looming bankruptcies for various sectors first in line: Small(er) Retail, Events, Restaurants, Bars, Hotels and more
• Partial unemployment with the potential of massive layoffs on a global scale, process already in place. Rehiring will be very selective and on a new norm basis. A depression?
• Advertising investments have dropped at alarming rates
• Irritations inside the EU based on ways to support the heavy toll countries such as Italy and Spain. Issues of Eurobonds on hold
• Uncovered pension funds will impact a large part of the third generation or retirees
• Payment difficulties for households, due to growing unemployment, difficulties paying rent and mortgages
• Government sovereign debt is exploding
• A global recession is inevitable, ranges between -2 through -15%, depending on location!
• Massive growth of social media, quickly leading to over-or under dramatic perceptions!
• Yet…the social aspect is lagging and can potentially lead to 

Second wave of consequences,  correctional steps, already in conceptual design stage around potential structural planned changes.

• Total re-engineering of the supply chain mantra of “just in time delivery” and heavy dependencies on China and India will change for the next X years!
• Cargo at large and long distance will be impacted, ships and aircraft, therefore ports and airports
• Governments will provide extraordinary stimulus packages and friendly more flexible payment terms for taxes and social charges
• WFH will be extended and take longer than anticipated and might become part of the new fabric
• Derailed business will take substantial time to get re-started again: aviation, trains, hospitality, most likely we can expect changes in eco-system, business models and mode of operations 
• Acceleration of 3D printing. Proven extremely helpful in healthcare 

Potential Paradigm shifts, a fundamental change in concepts and approach with  lasting impactful changes. The business and life as usual is heavily challenges.

·       This is most likely the Tipping Point for the digital transformation and economy, robots in production processes and we do almost everything remotely, virtually all supported by telecom infrastructure

• Re-structuring of basically every business with different modes of operations
• Installing and or acceleration of zero-base budgeting
• Upward revaluation of staff working in healthcare, education and food retail. Improved facilities, better working conditions, improved salaries
• Focus on “life essentials” supported by community driven live and online support events, meet/ups and courses
• Acceleration of business and private automation might lead to higher unemployment rates, impacting people’s buying power
• Health and elderly care will become more local and with strong central monitoring. Remote diagnosing, treatments, surgery, therapy etc. Fast access to personal medical records.
• Trade-off between privacy and public health (leading to privacy and big ethical challenges)
• Communications becomes Maslovian: Structural growth in voice and smart data traffic is part of every day life
• WFH has the potential to become the new standard, with a lasting impact on commercial real estate, traffic and climate
• Online education will take an increasing part of education, impact on people and real-estate is online is scalable
• Different labor relations with more independent contractors and short-term contracts
• Entertainment will have a “live” and systematic an “on-line” streaming dimension (Music, movies, shows, theatre, football, F1 and many more)
• Substantial increase in costs of living, despite lower gas prices 

Impact on Telecom (coverage, capacity, security, speed, quality, reliability). The extreme demand for data services provided by the CSP’s is delivered so far without major difficulties and with a looking recession and financial crisis around the corner  this can lead to postponement of infra structure reinforcement and thus 5G investments. This might be a trigger to focus even stronger on attacking new revenue streams in e.g. Enterprises and Public Sector or focus on additional offerings such as Gaming and E-Sports. Major question will be what the position will be from regulators on topics such as spectrum auctions, network sharing, last mile coverage, first responders.

• CSP’s providing various rate packages to keep or attract customers, a short(er) term action to conserve business
• Verizon is donating USD10 million to charity; it is supporting funds for online learning and disaster relief.

• Most of the major operators in the USA have signed up to the FCC’s ‘Keep Americans Connected Pledge’, which asks operators to not terminate any services to homes or small businesses, to waive late fees for any customers who are not able to pay their
• CSP’s providing various rate packages to keep or attract customers, this will be shorter
• Tipping Point for the digital transformation and economy, the devise is the principal gateway to the internet, Spotify and Netflix always on
• Intensification of communication, all formats-all devices, 24/7. Usage of social media
• On-line collaboration on working, innovation, social will continue to grow rapidly
• Coverage must become nationwide, this is not the case nowadays
• Rapid growth in gaming and e-sports, (JV’s in Asia created between SKT-AIS & Singtel)
• Steady demand for tele-solutions, to support remote deployment in particular for Health, Education such as file sharing, diagnostics, surgery, monitoring, consults etc
• Huge growth of video communications in households (Zoom, You Tube, Amazon Prime)
• Digital payments are the preferred methods 
• Video deployed for mass surveillance and its measures, users movements (leading to privacy and big ethical challenges)
• Data lakes and further analytics exploitation e.g. deeper understanding user browsing behaviour
• Exponential demand for Artificial Intelligence, M2M and Machine Learning
• Increase on crowd control through geo-localisation, CCTV etc (leading to privacy and big ethical challenges)
• Increased usage of wearable s, geo location, health watch. Augmented soft contact lenses for passive health tracking (B&L)

Winston Churchill “Never get a good crisis go to waste”