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Satya Easwaran
Partner and Leader
KPMG
KG Purushothaman
Partner and Telecom Sector Leader
KPMG

Enterprise Networks – The Lifeline Of The Emerging New World

The world today is facing a crisis of unprecedented proportions. The new way of remote working has all the makings of a new world order, the new normal that is seeing a shift toward localization, agility, digital governance, supply chain resilience, and measures to preserve capital. COVID-19 is proving to be the litmus test for the business continuity plans, business models and questioning the status quo and practices and style of working across organizations.

With a rapid increase in the spread of the virus across countries, the onus to keep the population connected has fallen on to the Communication Service Providers (CSPs), which on the one hand are helping families staying connected, helping governments in directing rescue and treatment efforts across the country as well as helping organizations to stay connected with their employees and customers, albeit remotely.

Notwithstanding the fact that CSPs are seeing a sudden upsurge in demand for data (in some countries excess of 40 percent), network coverage and implementation of the fair usage policies, CSPs have proven to be the proverbial silver lining to the cloud that is COVID-19, working relentlessly to assist communication needs of the people as well as acting as a backbone for businesses working out of their homes. The sudden shift to employees working from home has created a host of issues, from inadequate videoconferencing capabilities, security issues, and data privacy issues to lack of bandwidth at homes of employees.

With over 650 million subscribers to data services, an urban internet population of over 96 percent, and mobile data plans at USD 0.10 per GB, the thrust on data consumption in India does not come as a surprise. The proliferation of 4G networks, affordable smartphones and data packs result in average data consumption of up to 11 GB a month per user, poised to grow at 12 to 17 percent over the next two quarters. This will contribute to the much-needed financial boost for the ailing sector.

Enterprise solutions have seen a significant spike in consumption driven by demand being placed on home broadbands, backhaul resiliency (MPLS), Virtual private networks (VPNs), IoT sensors, cloud hosted managed services, content delivery networks (CDNs), and virtual communications in the era of social distancing. Enterprise solutions are helping governments plan and implement their relief efforts, building applications to reach out to wider population, IoT, and high compute power to track the spread and virus. As per a recent study done by KPMG on the media sector, the segments that are most effected by the crisis are those that rely on social gathering of people and physical distribution (events, films, TV, print), and those that have seen a spike are OTT, online gaming and radio. As per a 2019 IDC report, India’s current home broadband and enterprise B2B business services market stands at USD 4 billion, expected to grow at a CAGR of 16 percent. The onset of the pandemic, however, may result in a growth of even up to 20–25 percent.

As the digital revolution continues to unfold at an unbelievable pace, business leaders are grappling with the challenge of providing solutions across technologies, fueling disruptions across all facets of the enterprise network. The rapid transition from an industrial economy that favored mass production and scale to a digital economy that favors credible and relevant information is challenging the existing practices. The fourth industrial revolution is quickly unfolding as the evolution of AI, IoT and robotics moves firmly into the mainstream and upturns businesses like media and entertainment, transportation, healthcare, security and retail. This places the sector at the heart of this revolution, with CSPs being the lifeline.

A recent survey by KPMG in 2019 indicated that solutions built on cloud, IoT, blockchain and AI will see an upsurge in the next three years. Gartner forecasts that the Indian and global cloud market is expected to grow to USD 7 billion and USD 350 billion by 2022 respectively, and big data, AI/ML, advance analytics, and IoT will take centerstage in cloud adoption. It is, therefore, imperative for CSPs to focus on how they can expand to not only provide network connectivity but also work with enterprises in designing solutions across finance, transport, retail, health, and other industry segments to deliver the demand stemming from the crisis that has unfolded. The consumerization of technology entails that the future telecom business models are likely to be driven by enterprises using the networks-as-a-service model.

This presents CSPs with an opportunity to provide secure and efficient networking services to the enterprises. It is also important to be cognizant of the associated risks that come with these solutions, including cyber risks, data privacy risks, risk emanating from third parties/contractors, and risk of non-compliance to regulations. With respect to cyber, it is critical to focus on solutions that enable pragmatic remote-working security controls, patch updates that avoid ransomware attacks, and early warning signal systems that remind employees about disaster-themed phishing attacks.

The key to succeed is to support enterprises in building solutions that will address key factors impacting their business:

  • Supply chain crunch with critical raw material not available for production;
  • Liquidity crisis caused by cash crunch;
  • Channel resilience to ensure customer delight; and
  • Comply with mandatory regulations.

Third parties will be playing an even bigger role in the new normal. The new normal will see cloud-based/virtual call centers, distribution centers, sales engines, application support, technical support, after-sales support, and collection management. Enterprises will require solutions that will help third parties/contractors provide secure and seamless service to end-customers. CSPs will play a very crucial role in bringing this ecosystem of innovative third parties, cloud partners, business houses, and connectivity providers together.

To conclude, while COVID-19 is a reality that no one can escape from, what it also presents is an opportunity for CSPs and enterprises to offer solutions that are relevant, responsive, resilient, secure, and interoperable. While it may seem to be an uphill task at this point, in the longer run, the industry can expect journeys that are transformational with never-seen-before network solutions hitting the market, resulting in a win-win for the entire ecosystem.

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