As cities locked down early in the pandemic and retail closed, telcos saw one of their key channels for sales and services disrupted. Call volumes to contact centres soared and operators moved quickly to build virtual contact centres. In Australia, telcos announced the closure of some offshore contact centres and the return of local jobs, supported by solutions like Webex^[1] or Zendesk^[2]. Some are now considering whether this shift could be permanent. Vodafone has even increased its investment in AI contact centre solutions^[3] despite retail stores reopening.

Telecommunication services proved to be essential through lockdown in keeping countries running. Operators have recognised this and offered additional services – such as bigger data allowances and special solutions for schools, healthcare, small businesses and emergency services – and payment relief^[4], increasing brand value and customer loyalty.

Networks have also coped with the increased traffic. Some operators have reported 20% to 60% increases in network traffic, correlating with the severity of government ordered lockdowns^[5]. In Australia, Telstra announced it would bring forward a $500m investment in network capacity^[6], while Vodafone switched on its first section of 5G^[7] and announced network integration to be a key priority following its merger with TPG Telecom^[8]. Overseas operators have launched or expanded 5G networks in recent weeks, with the number of global 5G operators growing 14% in Q2 2020^[9].

While no one can predict how the next 18-24 months will play out, we know the virus, the resulting lock downs and economic impact has changed the foundation on which telco business models are built – for good. Consumer behaviour has experienced a rapid, forceful shift and is unlikely to return to normal.  

While it’s clear we’re experiencing a global recession, there is little clarity from economists on its depth and duration. The state of the overall economy will have a significant impact on private and public investment into new networks, subsidies and services, and the ability of consumers to pay for these products.
Our global telecom experts evaluated the critical uncertainties that will have the biggest impact across the economy, technology, political and society in the next 12-18 months. The two key uncertainties are:

• The future development of price levels and operators’ ability to monetise infrastructure, products and services. Will we see declining price levels driven by regulation and/or market demand or a trend towards premium pricing based on an operator’s ability to differentiate?
• The engagement preferences of customers, driven by the investment of operators in digitising customer interfaces and the willingness of consumers to adopt digital interaction. Will customers prefer to engage in-person or opt for digital?

From the plausible yet extreme endpoints of these uncertainties, we devised four possible visions of the future.

As Peter Drucker wrote in his book, Managing in Turbulent Times, “The greatest danger in times of turbulence is not the turbulence itself, but to act with yesterday’s logic”. While predicting the future is clearly impossible, scenario design isolates the risks and opportunities of certain strategic issues. As opposed to conventional strategic analysis, which fails to address highly uncertain environments, scenario design can help move businesses beyond the usual planning horizon. It develops robust approaches that work in different potential futures.

We advise telcos to critically look at current strategic plans and ask yourself a number of questions:

• Have you applied scenario thinking to your strategic planning?
• How robust and adaptable is your current strategy and strategic plan?
• Do you have clear indicators (leading rather than lagging) to show where the telco landscape is going?
• Do you have a clear and recent view on how your current strategic initiatives will hold up in different future plausible scenarios?