Telcos Can 'Roar Out of Recession' With Strategic Balance of Cost Cuts and Investment

As the world emerges from a four‑month lockdown, telecommunications companies have faced a mixed landscape. Core revenues from prepaid customers have fallen 20‑30%, reflecting either an economic shock or a shift toward Wi‑Fi as people stay home. In some markets, governments have mandated reduced rates or free services, compounding the revenue squeeze.

Despite these challenges, telcos are likely seeing Net Promoter Scores (NPS) at record highs. During crises, mobile networks become essential lifelines, and the human workforce behind them has proven resilient under unprecedented demand.

Business Growth Amid Adversity

Unlike energy or hospitality, telcos have not been devastated; certain segments are actually expanding. Carrier‑billing for digital payments is surging—whether for streaming subscriptions or online gaming, telcos are capturing more traffic and revenue than ever before.

With a global recovery expected sometime in 2021, the question is how telcos can move from survival to thriving in a rapidly changing world.

Learning from Harvard Business Review

Harvard Business Review’s 2010 article, “Roaring Out of Recession,” outlines how progressive firms balance defensive cost cuts with offensive investments—marketing, asset acquisition, and R&D—to build long‑term growth.

Start With Smart Cost Reduction

Cost trimming is inevitable during COVID‑19, but it must be surgical. Eliminating non‑essential spend protects a company’s ability to invest when the market rebounds.

Fuel Growth with Strategic Investments

Telcos should prioritize overdue digital‑transformation projects that enhance customer experience and unlock future cost efficiencies. Three investment pillars stand out:

1. Marketing – Rather than cutting budgets, re‑tool marketing to monetize untapped assets and reach new B2B clients. As 5G expands, IoT use‑cases will create fresh revenue streams that marketing can champion.
2. Asset Acquisitions – A strong balance sheet opens doors to discounted acquisitions of struggling competitors or niche startups, accelerating consolidation and expanding service portfolios.
3. R&D – The next wave of telco innovation hinges on today’s R&D. Building proprietary technologies, products, and services will sustain competitive advantage.

By monetizing existing assets, acquiring complementary ones at lower cost, and driving R&D, telcos can not only survive the downturn but emerge stronger—ready to roar out of recession.

Author: Josh Gosliner, Global Head of Market Strategy, Juvo.