The COVID-19 global pandemic has had a massive impact on all facets the economy and even more had a significant impact on the wireless industry, and on wireless consumer behavior.
The wireless industry is in a unique position relative to other industries, since the connection that wireless carriers provide is more essential now than ever before. What is the opportunity for wireless providers? What shifts do wireless carriers need to make? What changes will be felt in the wireless industry long after the pandemic has run its course?
Here are four ways that COVID-19 will change the wireless industry.
1. The wireless industry can expect a (short term) financial hit
As the economy heads into a downturn, the impacts will be felt everyone, the wireless industry included. Many stores are facing difficult decisions, with others already closing their doors, which will have a major impact on sales and revenue.
However, even if stores weren’t forced to close, sales would still be low, as consumers are not looking to switch their wireless providers in a time of significant uncertainty. And while this means lower gross activations, carriers will likely see lower churn as well. In fact, Wall Street analysts are forecasting that the overall impact to be a reduction in net additions for the whole wireless industry.
Consumers are also recognizing that now, more than ever, telecommunications has immense value and is intrinsic to stay connected, personally and professionally. A recent study indicates that consumers are planning to spend 19% more on telecom in the future.
So, while the industry as a whole may see financial loss in the short term, it has been widely regarded that the wireless industry will fare better relative to other industries, such as hospitality and tourism. The connectivity that the wireless industry provides is now an essential part of our personal and professional lives.
Which brings me to #2.
2. Wireless will become an essential service (with universal access required)
In both Canada and the US, telecommunications has been treated as an essential service. Schools, universities, businesses, entire sectors of the economy are now 100% dependent on the connection that telecom provides. Before the pandemic hit, you could (and should) make the argument that access to the internet is a requirement to succeed in school, in searching for work, and in performing your job well.
Now, it’s no longer a requirement. It’s a necessity; as fundamental as a level in Maslow’s Hierarchy of Needs. Moving forward, telecommunications will be seen as vital as water and energy.
That has a significant impact to how the industry is regulated.
Think about how an essential service should be universally available to everyone, including those in very remote locations. If having access to a secure connection is view the same way (which it will be), that would mean wireless providers will be required to build out a network that ensures universal access for everyone in their coverage area. To do that requires a hefty investment into the network and support from the government, especially as we ramp up to 5G.
And speaking of network investment…
3. COVID-19 will speed up the investment in 5G
With the increased dependence on networks as our source of personal and professional connection, network reliability is in focus now more than ever. Those providers who have made investments in the quality of their networks will likely benefit from those investments. In fact, Ericsson has reported a 31% higher ARPU and 27% lower churn rate for providers with the highest network quality.
The focus on reliability and the measurable return on high quality networks is solidifying the business case for investments. The returns on 5G just skyrocketed. We’re already seeing providers moving their 5G investments forward because of the promised reliability, measurable return on high quality networks, and increased speeds. No one can argue against that business case.
But just because there is a need doesn’t change the level of investment required to get there. Providers will have to find those dollars through cost savings. And one way to save dollars is to automate serving customers through self-service options.
4. Wireless retail consumers will be forced to adopt self-serve
The portion of online sales and support for wireless providers has been relatively low compared to other industries.
Customers make purchases in-store, and call into the support center, or head into the store for support. But now with doors closed and social distance guidelines in place, wireless retailers are forced to come up with online self-serve options for serving the customers. And customers are going online for their purchases, fueling the growth of eCommerce.
At iQmetrix, we’ve created a suite of online tools for our retailer clients who either can’t allow customers in their stores, or want to limit the number of customers in their store.
So, while the customer — for now — is being pushed to self-serve for wireless purchases and support in a way that they weren’t before, the question is: will this impact wireless retail long term?
Given the investments needed to improve their network, providers will look for ways to fund that by decreasing their cost structure. Self-serve is a great option for decreasing costs. We’ll likely see providers continue to push self-serve options onto the customer. And the wireless customer is more likely to adopt self-serve, given the changes in behavior we’ve all had to adopt now, and will continue to for the foreseeable future.
And just like anything else, with enough practice, customers will get used to the convenience of self-serve.
As John Stankey of AT&T states, the customer will start thinking differently about their behavior, and may likely start to experiment with online tools that the customer hasn’t tried before. This is how consumer behavior change happens: Once customers start to realize, out of necessity, the convenience of self-serve, online, and curbside pickup, these self-serve options will become much more commonplace, and very likely have a foothold in the long term.
How to get an online presence
Companies with a strong digital footprint will be set for success in the market with their digital readiness, but not everyone has an online presence.
The good news is that going online doesn’t have to be complicated or costly. Learn more about how iQmetrix is responding to the needs of wireless retailers.