Is COVID-19 Choking the 5G Dream?
The Coronavirus outbreak that has been plaguing the world is best known to paralyze the respiratory system of the infected people. In a way not different from its physical effects, the pandemic is also choking global markets and locking down economies. The 5G technology, which till now had a bright future, seems to be inching towards being one of the liabilities. Or is this far from the ground reality? Let’s take a look.
COVID-19 has hit the world markets hard and sooner or later, people are going to feel the cash crunch. Consumers won’t stop using mobile phones, but most won’t be in a position to upgrade to a new technology and related devices. In fact, a recent report by Ipsos found that 37 per cent of US consumers believe the pandemic will have an impact on their personal finances. People in other key 5G markets are feeling the heat too, with figures in Japan being at 56 per cent; Australia at 40 per cent; and Italy 41 per cent.
That’s not all. The areas from which 5G could have benefited, are facing the domino effect. The Sports sector, which was touted as one of the 5G use cases, has taken a hit. The US NBA and European football leagues are suspended indefinitely, and for the first time in its history, the Eurovision Song Contest has been cancelled.
Coverage and device availability issues
2020 could have been the year of the 5G-enabled smartphone, and several markets in the world had already witnessed the launch of this technology. Plans could be put on hold because of mandatory factory closures, which would impact the availability of parts required for devices and networks. Moreover, the social distancing norms could put additional pressure on communication networks, compelling operators to focus their energies on maintaining the current networks instead of setting up new ones.
That’s not all. Operators and companies offering infrastructure need approvals from local governments to establish new cell sites to improve their existing 4G networks and deploy 5G. Because most government offices are shut due to lockdowns, obtaining permissions is an issue.
Big brands impacted
A recent report by Forbes has stated that 5G rollouts across Europe are indefinitely delayed. Huawei, which is one of the manufacturers supplying kits for Europe’s 5G networks, stated that this lag could continue until “the time when the pandemic is brought under control”. Since no one can predict for sure as to when the pandemic will be stopped in its tracks, the plans of a leading brand like Apple are also likely to go for a toss. Reports have suggested that Apple could be forced to delay the launch of its 5G-enabled iPhone 12, which was reportedly slated for a September 2020 launch due to the COVID-19 crisis.
Some Key Positives
The Black Swan effect
Experts point out that black swan events, such as pandemics and recessions, alter the course of entire economies, businesses, and governments. The bubonic plague in the 1300s broke down the feudal system in Europe. Closer to our times, the recession of 2008 led to the rise of companies like Uber and Airbnb, because the financial crises led to people adopt the idea of sharing cab rides and spare rooms.
With COVID-19, we can see a change in how businesses and consumers are behaving. Airlines are using their flights for cargo movement; companies like Germany-based Beiersdorf and France-based L’Oreal are diverting production from face creams and perfumes to disinfectants and sanitizers; Japan-based Sharp is making surgical masks at a facility that makes electronic displays; India-based auto manufacturer Mahindra & Mahindra is developing ventilators – and the list goes on.
In the longer term, pandemics and recessions tend to bring about disruptions in the business landscape, sometimes even opening up new business avenues. Now is the time to wait and watch.
Digital supply chains & smart cities
One thing is for certain that this pandemic will drive digital implementations through the roof. China had to scale down supplies of products due to the pandemic, the impact of which was felt globally. This calls for a streamlining of global supply chains using sophisticated technologies such as 5G, IoT, Blockchain, among others. B2B giants like Amazon and Ali Baba may already be devising strategies along these lines as we speak.
COVID-19 has really forced government agencies across the world to step on the accelerator. For instance, China constructed a 645,000 sq. feet hospital in Wuhan in just 10 days. South Korea rapidly tested over 200,000 of its citizens; using smartphones to track the movement of the infected people and alerting the healthy ones about those movements through real-time updates. There’s a lot for governments to learn from the pandemic, and once those lessons are learnt, we will be inching towards the creation of smart cities, sooner than later. The key players who will benefit from this paradigm change would be Microsoft, Cisco, Siemens, and other digital start-ups across the US and Europe.
While everything in this world is slowing down due to the pandemic, there still seems to be light at the end of the dark tunnel for 5G. Mobile network provider Verizon conducted a study and found a 75 percent increase in bandwidth demand from March 8 to 15, 2020. That’s no surprise considering that people under mandatory lockdowns are working remotely, kids are learning in virtual classrooms, families are using video calling apps to stay connected with loved ones, and groceries are being purchased over apps and delivered in a contactless manner.
Even companies like Samsung are gung-ho about their 5G prospects despite a smartphone market slowdown due to COVID-19. According to Zdnet, Samsung’s semiconductor chief, Kim Ki-nam, said the global chip market would also grow this year due to growing demand for artificial intelligence, automobiles, and 5G.
Overall, experts believe that the coronavirus lockdown could be a blessing in disguise for the telecom sector. Once we have seen the last of the epidemic, millions of global users will be more familiar with digital communication tools. Telco networks would be become wiser with a first-hand experience of dynamic network traffic management, and businesses would have gotten a deeper understanding of the challenges posed by remote working. The need for faster communication, better virus outbreak predictions, and AI-driven health management tools will provide more use cases and investment rationale for 5G. It will definitely be a big push for AI & Machine Learning and innovative telco solutions.
Till then, let’s stay home and stay safe!