Coronavirus could cost telecoms operators $25bn in roaming revenue
The deep uncertainty caused by the COVID-19 pandemic has seen Dell and VMWare pull their fiscal forecasts
Having moved from an outbreak into a full-blown pandemic, the COVID-19 virus crisis is wreaking havoc across the world and impacting the technology world.
As governments and healthcare services desperately work to tackle the virus, its effect on the technology world appears to be ramping up.
Telecoms is one sector that’s now been flagged to take a massive hit from the coronavirus. Operators are expected to lose more than $25 billion in revenue generated from roaming, according to Juniper Research, as COVID-19 is forcing would-be travellers to stay at home.
In what the company describes as a “high impact scenario”, the coronavirus crisis could be set to go on for another nine months with travel restrictions in place.
Given lives are being lost in their thousands, a loss of revenue for telecoms companies might not seem too dire. But a reduction in revenue means a reduction in profits and, consequently, less money to invest in infrastructure, all at a time when 5G was set to ballon in coverage and popularity.
And a revenue loss also leads to job losses, meaning the impact of the virus extends beyond its immediate health effects.
There have been opportunities for the technology world amid the crisis; providers of remote and home working tools and collaboration software have seen a huge rise in users as those who can work from home do so to shelter from the coronavirus.
Microsoft reported that its Teams collaboration software has seen a rise of more than 12 million users in March. And technology companies and academics have put their heads together to try and work out how they can help tackle the virus.
However, the effect of a lockdown on the tech industry is still ringing the loudest. Smartphone sales have suffered their “biggest ever” fall due to the pandemic, Apple looks set to delay its 5G iPhone 12, and major software development has been put on hold as tech companies look to shield their staff from COVID-19 as much as possible.
It also appears tech companies are struggling to predict what effect the virus might have week on week - Dell and VMWare’s withholding of their 2021 financial guidance being evidence of that.
"While the Company currently is seeing heightened interest in work from home solutions and continuing execution in its global supply chain, and remains confident in its liquidity position, the Company is unable to predict the extent to which the global COVID-19 pandemic may adversely impact its business operations, financial performance and results of operations for the current fiscal year,” Dell said in a filing to the US Securities and Exchange Commission (SEC) on Thursday.
As each week passes by, the technology world seems to constrict the more the virus spreads. And it would appear that it’s set to get worse before it gets better.
But there is a silver lining in that the technology industry is best placed to give business and daily life some semblance of normality amid lockdowns and deep uncertainty.
“This will be the most high-tech response to a pandemic in human history,” said Gerard Grech, chief executive at Tech Nation. “UK tech will have a key role to play globally, with the potential to save lives and to connect people in ways we may never have expected."
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