Communicate better in the time of Covid-19

Last week, Vodacom became the first major mobile network operator to commit to lowering its internet connectivity prices by up to 40% starting on April 1. But is that perhaps too late for many consumers already having to work from home?

Communications operators are well placed to see increased demand and therefore revenues for their services during this era of social distancing brought on by fears relating to the global coronavirus outbreak.

As a result, a number of organisations are encouraging people to work from home, while limiting travel and discouraging face-to-face meetings and interactions.

This is where technology comes in to fill the gap.

Those who can’t take advantage of online connections at offices or workplaces are likely to turn to their cellphones as a primary connection.

One of the main worries for those able to work from home at this time is the cost of communicating. It is no longer about scrolling through social media posts; it is video conferencing, streaming and cloud services, which are likely to be some of the main tools being used to carry on doing business. Fast, stable and reliable connections will become a necessity in people’s homes until the national state of disaster is called off.

Perhaps mobile operators and fibre-to-the-home businesses can use this opportunity to lower prices and offer better deals on internet connections. In doing their part to contribute to the national agenda, such businesses are likely to recover the loss in margins through increased traffic on networks.

PRIVATE JETS

Fear is, perversely, a good thing for private jet companies. After 9/11, business boomed. The coronavirus outbreak too has spread panic about boarding commercial flights. Spotting the opportunity, UK broker Air Partner, which evacuated Europeans from Wuhan on chartered airliners, launched a virus evacuation service last week.

But Covid-19 is more drag than thrust on the profitability of private jet operators.

Corporations and ultrawealthy individuals have sought out private jets to avoid infection risks in crowded airports and sardine-packed commercial flights. Private flights from Hong Kong leapt more than 200% in January. Those gains are no more than a blip though.

They are overshadowed by cancellations triggered by infection fears and event cancellations from international sporting fixtures to car shows. Europe has already seen the uplift in demand to fly privately peak then decline.

In a recession, demand will drop as luxury spending dives and executives are downgraded to economy.

More executives fly privately in the US than anywhere else. NetJets, part of Warren Buffett’s conglomerate, and Directional Aviation, diversified within the private jet business, stand to gain market share. NetJets’ closest competitor, Wheels Up, a startup that has yet to turn profitable, will be tested in a downturn.

More troublingly, supply chain localisation triggered by the coronavirus will slacken any recovery in private business travel. But the more intriguing secular challenge is that pundits are calling an end to globalisation, of which private jets are a symbol.