Spain’s leading operators could grow income by 12% by innovating in entertainment content and services
Wednesday, 01 July, 2020

Spain’s leading telecom operators could avoid the fall in income in the residential sector arising from the COVID-19 crisis by developing entertainment content and services that respond to the new needs of customers. Over the next 12 months it will be possible, through innovation, for operators to grow their income by more than 12%, compensating for loss of business in other services.

According to an everis study which analyzes the measures adopted by the sector to prevent future risks and identify new opportunities, leading operators could earn around 3 billion euros if they develop and market new contents and services geared towards offering entertainment to their users, in an environment in which the reduced capacity of venues for cultural and sporting events will limit the opportunities to physically attend events. 

The telecoms sector is among the industries that were able to reinvent itself and offset the impact of the current health crisis, thanks to the widespread implementation of remote working and the use of video calls, online gaming and online shopping. Despite the serious impact, offsets have been possible thanks to the innovation and efforts of the sector. Nevertheless, it is important to highlight the fact that operators’ offerings must be updated and they must offer customers new options in order to capture that income.

Faced with the uncertainty surrounding the ultimate real impact of this situation, everis is working with operators designing and implementing a series of customer-focused strategic actions aimed at minimizing the possible risks of the economic crisis. They include the shielding of customers, flexible payment terms, or financing of technology equipment (PCs, laptops, tablets, AR/VR/XR, etc.) in order to optimize connectivity for new advanced offers of telematic and entertainment services to come in the future.  

The burdens: commercial slowdown, the fall in international tourism and latent arrears.

The study also indicates that Spansih telecom operators could suffer a 4% drop in income as a result of three factors arising from the pandemic: the commercial slowdown, the sharp drop in international tourism and latent arrears. 

The report considers the effects on the telecom profits of the two and a half months - from 15 March to 25 May - in which operators registered practically no sales. 

Taking the roaming revenue of the CNMC and the volume of tourists in 2017, a comparable year to 2019, the study reveals that roaming losses could amount to 400 million euros, or 1.7% of income, in light of a fall of 90% in overseas tourism (from outside the EU) and of 70% in tourism within the EU. On top of this scenario, there are arrears arising from increased unemployment, through Spain’s permanent (ERE) and temporary redundancy (ERTE) schemes to be taken in to account, with the number of those out of work reaching five million.