Coronavirus impact: How data proved to be the new oil and saviour in 2020

While the Coronavirus (Covid-19) pandemic pushed life and economy out of gear, it was data that kept the hope of ‘normalcy’ alive. The biggest beneficiary of the shift to a new work culture was the telecom sector due to the tremendous rise in data demand.

Data indeed proved to be the new oil in 2020. It turned out to be a saviour as offices shifted to homes. Seamless broadband service is the backbone of remote working and telecom providers leveraged this opportunity to the maximum.

“It was data that kept the economy going during the lockdown,” Hemant Joshi, an independent expert said.

Another expert said that adoption of technologies, especially advanced communication and collaboration accelerated in 2020, worldwide. The telecom sector assumed a critical role to ensure that individuals, businesses, governments and practically everyone were connected. Solely from that perspective, the sector has risen to the situation and deserves to be complimented.

According to some reports, during the lockdown, India's data consumption grew several notches with demand on OTT (over-the-top) and VoD (video-on-demand) platforms rising by a whopping 947% as against February.

According to Frankfurt-based internet exchange, DE-CIX, data consumption on OTT and VoD platforms rose by 249% during March and April, as against February 2020.

While data stands out as the biggest contribution from the telecom space, the overall sector remained a mixed bag.

“We missed the 5G bus as a country but the positive side is that there is now consolidation in terms of price points and it is not going down,” Joshi said.

Analysts feel that 5G ramp up will happen only with uptake of enterprise applications in manufacturing, transportation, healthcare, education, utilities and entertainment, among others.

Recently, the Union Cabinet approved the formalities for conducting 4G spectrum auctions by March 31, 2021. The 5G airwaves will not be part of these auctions.

The auction plan includes the Department of Telecommunications selling 2,251 megahertz (MHz) of spectrum worth Rs 3.92 trillion. It will auction spectrum in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz bands.

The year 2020 began on a somewhat sour note with the Supreme Court directing Bharti Airtel and Vodafone Idea (VI) to cough up a substantial amount on account of adjusted gross revenue (AGR) related payments.

The Supreme Court of India in October 2019 delivered the verdict on the AGR issue for calculating government dues of telecom companies such as licence fee and spectrum usage charges.

After the top court had rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices seeking a review of the judgement which widened the definition of AGR by including non-telecom revenues, the DoT in March moved a plea seeking staggered payment over 20 years.

The top court, on June 18 asked the telecom companies including Bharti Airtel, Vodafone to file their books of accounts for the last ten years and give a reasonable time frame for paying the AGR dues.

Experts are of the view that the verdict changed the contours of competitive dynamics. AGR dispute started more than 15 years ago, and this kind of outcome was largely anticipated by the industry.

Beyond the massive financial obligations on select operators, it captured significant management bandwidth of telecom industry and the government.

Looking ahead, the year 2021 will carry forward the technical trends of 2020.

"The year 2021 will further cement the trends we experienced in 2020. Remote working is here to stay. Data usage growth is here to stay. Fibre based broadband will grow rapidly. Significant growth in content consumption and fintech are here to stay. Industry 4.0 will see a further boost as economies are slowly reviving," said Jaideep Ghosh, chief operating officer at Shardul Amarchand Mangaldas & Co.