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Will optical communications industry survive the pandemic?

2020-06-11 22:23:01Source:CIOE

Recently, optical communications market research agency LightCounting evaluated the impact of COVID-19 on the industry after the first three months.


The first quarter of 2020 has drawn to a close and the world is being plagued by the COVID-19 pandemic, with many countries now hit the pause button on their economies to slow the spread of the epidemic. While there is still a great deal of uncertainty about the magnitude and duration of the pandemic as well as for its impact on the economy, there is no doubt that the human and economic costs will be enormous.



Against this dire backdrop, telecommunications and data centers were designated as essential base businesses, allowing for continued operations. But beyond that, how can we expect the telecom/optical communications ecosystem to grow?

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LightCounting believes that a coronavirus pandemic in 2020-2021 could be conducive to the acceleration of the trend towards a "digital economy".


In the United States, for example, thousands of students are now attending college and high school remotely, and tens of millions of adult workers and their employers are getting their first taste of working from home.


Enterprises may realize that productivity has not been affected and that there are benefits such as office costs reduction and greenhouse gas emissions reduction.


After COVID-19 is finally under control (finger-cross this day will come soon), new habits such as a high attention to social hygiene or touch-free shopping will continue for a long time. This should boost the use of digital wallets, online shopping, food and grocery delivery services, and these concepts will be immerged into new areas such as retail pharmacies.


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Likewise, people may have a hard time with traditional public transportation solutions such as subways, trains, buses and airplanes. Alternatives offer more isolation and protection, such as bicycling, small robotic taxis and telecommuting, which are likely to be more used and accepted than before the virus spread.


In addition, the impact of the virus will expose and highlight current weaknesses and inequalities in broadband access and medical access, which will drive greater access to fixed and mobile Internet in poor and rural areas and the wider use of telemedicine.


Finally, the companies supporting the digital transformation, including Alphabet, Amazon, Apple, Facebook and Microsoft, are well positioned to withstand the inevitable but short-lived decline in smartphone, tablet and laptop sales and online advertising revenue because they have virtually no debt and hundreds of billions in cash flow on hand. In contrast, shopping centers and other brick-and-mortar retail chains could be hit harder by the epidemic.


Of course, at this point, this future scenario is mere speculation, and it assumes that we have somehow managed to overcome the enormous economic and social challenges by the pandemic without falling into a global depression. Overall, however, we should be grateful to be in this industry for the storm will surely ends.


Author

Zhou Xue, Vice President of Research & Business Development, LightCounting


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