Covid-19: What impact on the digital infrastructure sector and fiber deployment?

Study Methodology

The Covid-19 health crisis has impacted the entire digital infrastructure sector, particularly the fiber deployment as part of the France THD plan and the New Deal Mobile. The methodology of the study, conducted by the EY and Tactis consortium at the request of the Infranum Federation, is based on:
• Around fifty interviews with a representative panel of stakeholders in the digital infrastructure sector
• A quantitative survey conducted among around one hundred members of the sector

Digital Infrastructure: An Essential Sector

Whether it's teleworking, telemedicine, or distance learning, the digital infrastructure sector played an "essential" role in maintaining activity in France during the lockdown period. The video below presents some illustrated examples.

Covid-19: A Significant Economic Impact on a Previously Booming Sector

Despite the exceptional measures put in place by the government, some players in the sector have experienced economic problems. On average, companies lost 40% of their turnover, which caused cash flow problems for 30% of the stakeholders surveyed. Although industry players have weathered the impact of the crisis, some have nonetheless been weakened. Thus, 11% of industry players are considering layoffs within the next six months.

No halt to deployment activity... but a delay observed for 2020

In terms of deployments, 2020 will suffer from a delay due to the coronavirus, with a return to a level of 4.3 million fiber connections installed, lower than in 2019. Initially, a deployment of 5.3 million connections was planned for 2020. The number of unproduced connections (fallen or delayed) is therefore estimated at 1 million. This estimate could increase depending on whether or not the 7 support measures for the recovery of the digital infrastructure sector detailed at the end of this article are adopted.

Increased Cost of Supply

Compliance with Covid-19 health measures has led to an increase in the cost of supply, mainly due to:

- Duplication of equipment and social vehicles in factories for social distancing
- Purchase of PPE, disinfection of tools, and increased locker room space to comply with hygiene regulations
- Increased work lead time (related to obtaining permits)
- Lower productivity on site
- Additional "Covid-related" supervisors on site.

Strong initiatives have ensured the sector's critical activities

- Corrective maintenance provided and network capacity maintained by operators,
- Creation of a web platform for reporting field difficulties,
- More than 3 million masks purchased and supplied at cost price by Infranum & Folan for sector stakeholders,
- Physical distancing protocols to ensure the continuity of deployments,
- Financial support from operators and contractors to help smaller players.

What are the main focuses of a recovery plan?

- Activate efficiency gain “niches” not covered by the ELAN law to offset the drop in productivity caused by compliance with barrier gestures,
- Implement “sudden” actions starting this summer to rebuild the production tools necessary for the continued fiber deployment and connection,
- Study the consideration of economic impacts in consultation with public and private stakeholders, and through burden reduction measures taken by the State,
- Financially support industry players, and particularly VSEs/SMEs for which maintaining cash flow is essential at risk,
- Provide "good broadband" for all by the end of 2020 to end inequalities in access between homes and businesses,
- Recognize the sector as "essential" to enable continued deployments in the event of a new lockdown,
- Support the digital transformation of businesses and administrations to strengthen their resilience and guide them back to growth.