Geoff Varrall on connectivity and coronavirus

Zoom Teleconferencing Boom

The impact of the corona virus on telecoms is one obvious starting point – in last month’s posting, The Zoom Boom, we discussed the demand side impact of Covid-19 on teleconferencing.

Business is booming for Zoom Video, the remote conferencing services platform. Since the start of the year Zoom’s market value has risen by 57%. A company that few people had heard of a couple of years ago is now worth over $40 billion US dollars, more than the combined value of Nokia and Ericsson.

In the same week, OneWeb have announced they are considering entering Chapter 11 due to cash and funding issues. This particular pandemic is proving adept at destroying economic value but is also redistributing value at breakneck speed.

While some of this value redistribution might be temporary, there are business sectors such as aviation that could take years to recover with profound implications for the supply chains servicing those markets. By contrast the telecoms industry should emerge with a strengthened business model based on connectivity as the underlying enabler of remote working, with remote working as the underlying enabler of improved personal and administrative productivity. In parallel this should yield a net gain in social and economic equality.

Low tax economies such as the UK and the US will have to move towards the higher tax regimes of Sweden and Denmark, a shift that will be painful for some but that was significantly overdue. Economic equality is positively coupled to political stability so that should be good news as well. There will also be value shifts in the supply chain. It is hard for example to believe that the aviation industry will ever fully recover. However there are related growth opportunities within the space sector which may help balance out lower demand for conventional aircraft.

Read more here.

Access more articles in our COMMUNICATIONS series.

Smartphones importance during the pandemic

In this month’s posting, The Nearness of Flu, we review the role of smart phones in measuring, monitoring and managing the present pandemic.

The message is, keep finding something to talk about and people will want to read about it too.

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