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COVID-19 puts Year of 5G on hold

The telco industry might be in the limelight for the moment, but 5G looks like it is now taking a breather as the coronavirus pandemic continues to wreak havoc on society.

2020 was supposed to be the year 5G started to pay dividends. Telcos have been promising financial rewards in the enterprise segments, enterprise customers have been envisioning connectivity-based business models and the vendors were supposed to be supplying the technology to underpin it all. But the party might have to be delayed by another year.

“At Omdia we are revising our 5G forecast,” said Omdia 5G Practice Leader Dario Talmesio. “There are many factors to be looked at, including consumer confidence, business confidence, disposable income, employment data, availability of networks, availability of devices, retail environment, marketing budgets. all these are converging to one direction which is very negative for 5G eMBB.

“We previously believed that 2020 was going to be the real year of 5G. This is no longer that case under the current circumstances.”

Speaking at a media briefing, Huawei SVP Victor Zhang said the telcos are prioritising projects to improve resilience in existing networks as more customers work from home. There is only so much which can be done to continue the 5G rollout as engineers are forced to prioritise the network strain which is threatening today. 5G deployments will slow down as a result.

This is not necessarily a huge consequence for some vendors, Huawei and Nokia for instance have fixed broadband business units, but it might cause headaches for those who are focused on mobile.

Ahead of the Ericsson Annual General Meeting (AGM), which will take place virtually, CEO Börje Ekholm suggested there was no material impact to the firm just yet. Pointing to the 86 commercial 5G agreements and 27 live networks, Ekholm is seemingly trying to build confidence in the business, but it becomes difficult to ignore the logic behind a 5G slowdown.

Attention from the telcos is being diverted as reliable broadband and 4G networks are the gold standard during the outbreak, and you have to question whether there is 5G demand from the consumer to validate aggressive deployment strategies from the MNOs.

Looking ahead, September would have been a very interesting month for 5G excitement thanks to launch of Apple’s flagship device for the year. This would have been a series of 5G-capable smartphones that could have stirred the iCultists into a frenzy. Many analysts have suggested this launch could push 5G into the mainstream, but reports have been circulating that claim the bonanza could be scaled back.

It was suggested Apple would launch four devices in the autumn, ticking the boxes for multiple demographics, but supply problems for components might be the spanner in the works. What is worth noting is that there are also reports Apple is on track. As with everything associated with the media-shy iGiant, mixed reports are muddying the waters.

Looking at the wider smartphone segment, the demand is not likely to scale over the next few months to completely justify an aggressive 5G rollout.

If the telcos are to rationalize additional expenditure on 5G deployments, there would have to be customers on the other side to make use of the shiny, speedy networks. As it stands, some enterprise customers are prioritising manpower and investments towards existing day-to-day operations and also trying to reduce out-goings as a recession looms on the horizon, while consumers are also becoming increasingly cash conscious and with retail locations closed, sales are likely to become less common.

Last week, Counterpoint Research suggested smartphone shipments had declined by 14% over the course of February, and it would be very fair to assume the trend would continue (if not worsen) through March and beyond as more self-isolation measures are introduced around the world. New smartphone purchases are likely to be delayed for many for various reasons, eroding the demand for 5G connectivity.

Another very obvious issue which the telcos may well face is the sourcing of products and components. Although the main suppliers have been very vocal in suggesting their manufacturing capabilities are secure, that could change in a matter of weeks. These are companies who could be thrown off course by their own supply chains, and even if there have been business continuity measures put in place, we are heading to the realms of the unknown. Predicting the status quo of tomorrow and the impact of this pandemic is becoming almost impossible.

One final point to consider is the availability of spectrum, a scarce but critically important asset for the telcos.

There might be regions where the availability of spectrum is more attractive, but there are certainly many where the telcos are screaming out for more. With auctions being postponed due to the on-going challenges presented by the coronavirus, telcos might have no option but to delay the launch of some services. Spain is the most recent country to delay a spectrum auction, the 700 MHz band in this case, though French telecoms regulator ARCEP has already announced a postponement, alongside regulators in Austria and Portugal. Without this valuable resource, telcos will struggle to deliver the 5G experience which has been promised to so many in glitzy and glamorous advertising campaigns.

As it stands, the telcos are being forced to prioritise investment and attention elsewhere, forecasts on the number of 5G capable devices are likely to be lowered and delicately balanced supply chains could be thrown off course in a matter of days. The Chinese telcos could certainly counter this assumption with their own network deployments, but it would be a fair to bet on 2021 being the new Year of 5G.

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11 comments

  1. Avatar Heather Clark 01/04/2020 @ 2:52 pm

    We dont need 5g.

    • Avatar Lawrence Gavin 01/04/2020 @ 6:34 pm

      I agree 5g is not required, it has not been tested, no insurance will cover it and for good reason, it is a risk to our health!

    • Avatar SteveB 16/04/2020 @ 11:49 pm

      Theere are indications they install 5G masts or upgrade old once in hide without public discussion across the globe while people are locked not to see what really is going on. Crucial workers as per Agenda excure, including industry are working 24/7 on it. Thge same is happening to economy. In multiple economies Agenda says they are losing bilions of dolars in each national economy daily, which means possible hundreds of bilions or trillions in the world at the same time not saying the truth that those trilions were stolen by Agenda during last 3 decades for their sinister and secret global control plans (someone must finance this) and the trilions of dollars missing in global economy is their job, not coronavirus, where coronavirus is perfect excuse to hide and clean evidence so public won’t rebel and demand traitors heads.

  2. Avatar Leslie Anderson 01/04/2020 @ 3:45 pm

    I hope the 5G isn’t anything to do with the coronavirus God help us all if it is.

  3. Avatar Kavan W 02/04/2020 @ 12:16 am

    China will move forward with 5G, central planning will brush this off as a bump in the road. Then rest of the world will take longer to catch up.

    • Jamie Davies Jamie Davies 02/04/2020 @ 8:21 am

      Couldn’t agree more – by this time next year China will most likely be leading the world for development of 5G ecosystem – the biggest risk is whether an acceleration in China will force a splinter and the industry becomes fragmented. The political climate certainly makes this a possibility

  4. Avatar Robert Parris 02/04/2020 @ 7:40 pm

    Reading many negatives about 5G !! Masts erected while the public are on lockdown..??
    So we get these dangerous radio waves regardless and we might only get the mid range speeds at best but read that the low speed is similar to what 4G is now .petition going round to abolish the 5G Rollout, sign it.

  5. Avatar Neville Ali 03/04/2020 @ 7:21 am

    No To 5G. Far too many researchers have been silenced over its dangerous levels of radiation. Very convincing arguments that it is the called of the so called Corona Virus

  6. Avatar Rachel 03/04/2020 @ 4:55 pm

    Please we don’t need 5g
    😭😭😭😭😭😭😭😭

  7. Avatar Rachelle 06/04/2020 @ 8:50 am

    I for one am concerned that wherever there is 5G there is illness all the countries that have it nicely already rolled out are also very sick!!! Could we be misdiagnosing the symptoms and making the condition worse which is leading to such a high mortality rate!!! Too many questions and my mind hasn’t been put to rest with all the disclaimers about 5G being safe…. it would appear EMF isn’t safe….. our recent pandemic and other pandemics may be the result of all this in our environments 24/7…. most people never switch of their routers not even at night!!! Enough said!!

  8. Avatar Kim 06/04/2020 @ 9:22 am

    5g has nothing to do with coronavirus, stop feeding so much into it.. How can mobile network cause a deadly strain of pnemounia?

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