Challenges and Opportunities of 5G at the Time of COVID-19

Updated on Jan 27, 2021 by

The COVID-19 crisis has continued to spread around the world, bringing great hurts to both people's health, economic, and various industries. As one key role in the communication industry, 5G is definitely affected by this epidemic. According to one market report, the 5G infrastructure market size is estimated to be down by 22.7% in 2025, compared with the pre-COVID-19 estimation. Then what impacts will the COVID-19 bring for 5G networks? This article provides some insights about the impacts the COVID-19 brings for the 5G deployments currently, and how 5G service providers should prepare for the next step.

1. Supply Chain Disruption and Lack of Labors Retard the 5G Deployment.

In this coronavirus outbreak, most sectors are experiencing a disruption of the global supply chain. And this disruption reflects on the market directly, making it more challenging to purchase network devices and materials for normal production. And with the ongoing quarantines time, many people have to work at home, resulting in reduced levels of staffing at operators, vendors, and related engineering businesses in the short term. Even if the field staff try to maintain normal level services during this time, the reduced capacity for equipment manufacture and testing might as well affect the 5G deployment.

2. The Delay of 5G Standards Slows Down the Buildouts of the 5G Ecosystem.

Affected by the COVID-19, on March 23, 2020, 3GPP announced that the completion of Release 16 would be delayed for three months to June 2020, and the Release 17 will be delayed to September 2021. The current 5G network development depends on Release 15 which relies more on the 4G networks as the backbone for “non-standalone” 5G services. The Release 16 will enhance the "standalone" 5G network with faster upload and download speeds and include protocol enhancements for vehicle-to-everything (V2X) and industrial IoT applications. Release 17 will increase the specifications of 5G devices, and improve network performance. Though this delay won't affect the current Release 15 networks, it could impact 5G uptake in the next few years definitely.

3. COVID-19 Delayed the 5G Spectrum Auctions of the Major Countries.

The spectrum auction is also delayed due to the COVID-19 outbreak, which blows a country's ability to roll out 5G services on a large scale. At present, some major telecommunication operators and governments such as Spain, France, and Austria have decided to delay 5G spectrum auctions, further slowing down the 5G rollouts.

4. Lowered Demand for 5G Services Decelerates 5G Stations Deployment.

Before the COVID-19 crisis, it's expected that the increasing 5G subscribers would pay for the 5G services of the telecommunication operators. The 5G infrastructure market is expected to be driven by 5G enabled smartphones and increasing implementation of home automation technologies. However, the economical disruption caused by the coronavirus has lowered the purchase ability of most people, making them reprioritize their spending. With more people losing their jobs, most of them prefer to shift to less expensive smartphones, and even won't buy new phones, not let the 5G ones.

Besides, some enterprises also show declined interests in 5G services, because they have to focus on improving and maintaining their existing networks to accommodate rising data traffic and provide a relatively steady performance for their clients. This shift lowers demands for 5G, in turn, slows down the possibility of 5G base station deployment worldwide.

5. Site Licensing and Administration Are Hard to Get.

It's known that 5G networks use a higher band spectrum with shorter coverage, that's why numerous 5G small cells are needed both in rural areas and cities. While during the COVID-19 crisis, the government departments that are responsible for issuing such siting permitting and licenses have shut down, giving more difficulties for the operators.

Opportunity is always beside the challenge. Though the COVID-19 has negative effects on 5G deployments and is shifting demand patterns of people, there are still opportunities on 5G that can't be ignored in this coronavirus disaster.

6. Demands for Broadband and Higher Speed Enhance the 5G Services Popularity.

The seamless communication and network congestion have become normal during the COVID-19 pandemic. Especially when numerous people have to stay at home, shifting to work and learning at home, which has generated enormous broadband demands for Internet access. Remote work, telemedicine, and a major increase in video conferences are all major parts of the new work environment. According to the Verizon report of March, its web traffic has increased by 20 percent in one week, and video services have increased by at least 12 percent.

7. Rising Data Traffic Spur Operators to Invest More on 5G Networks.

As mentioned above, coronavirus-related data traffic has surged because people have to work and stay at home, and the economical market is also affected greatly. Though the COVID-19 may retard the 5G deployment in the areas that have not launched 5G networks, the investment in areas that already have 5G is likely to be doubled due to the great revenue that 5G services bring. Some telecom operators such as SK Telecom said 5G helped drive up its revenue due to 5G service expansion and data usage increase. And the largest operators such as Verizon and Vodafone have promised that they will increase the investment this year, including 5G deployment, to meet customers' rising demands of traffic.

In addition, having experienced the traffic booming during COVID-19, some regions like China have gradually recovered from the crisis, and start to set the pace to 5G deployment. The country's three state-owned telecoms operators have already awarded nearly $10 billion worth of 5G contracts, and are projected to collectively spend $25.5 billion on 5G equipment throughout 2020, installing half a million base stations that will provide 5G coverage to every city in China. Other regions may be slowed down due to the virus epidemic, but it won't be far away.

5G at the Time of COVID-19: Short-term Slowdown, Long-term Gain

A crisis can be a driver of technological advancement. As the Wall Street research analysts anticipated, the COVID-19 crisis has accelerated our society's transition to broadband and digitization by at least a decade. That's true. During this coronavirus pandemic, people from different areas keep touch with each other via PC or mobile devices, and telework and online learning become the only choice to keep the normal activities, and even the telemedicine is used to care for the patients. All these are based on great network capacity and higher speed. Capable of its premium performance, 5G is in some cases has proven its worth despite the challenges in many industries currently.

Furthermore, as AI and IoT now get popular, many enterprises and industrial companies with ambitions for AI and IoT can not wait for 5G to mature. Some of them are actively experimenting with new business models that depend on existing 5G cellular connectivity. Once the economy starts to normalize, 5G, capable of low latency, higher data transfer speed, and the capacity to carry a large number of connections, is expected to enable various companies and enterprises to revitalize their business, helping them better positioned to withstand future economic challenges in the long term.

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